Vol 1 Part 1 Chapter 1 Colonial/Articles of Confederation America and the Federalist Founding Fathers: (A) Intro and Context

Welcome

The opening two modules on George Washington and his role as America’s “First Economic Developer” is meant to trigger both interest and questions as to whether this rather strange mixture of topics can present a viable historical approach to the study of economic development, but also policy studies and even American history itself.

The two modules set the stage for a view of Washington and his role in all three, and prepare the reader for what lies ahead. This module lays out a intro road map of what lies ahead: the key themes we develop in the book, both short-term and long-term, and presents a different view of history from the bottoms-up, from the perspective of states and local communities using economic development policy as a filter to understand change and our evolution since 1789.

In the two Washington modules, I develop a perspective on our First Founding Father that is far from typical–precisely because I view him from a different angle, and wind up seeing different things and asking different questions.

In my view Washington was primarily an early American businessman who became a real estate developer before he ever inherited Mount Vernon, a plantation “farmer”, who turned general, and then became a full-time politician. He was reputed to be America’s richest man when he died, and our modules convincingly demonstrate he not only combined economic development with personal profit, but did it to advance a national vision. He was as we shall see not unique, but he was exceptional. In my view he well-deserves to be our First Founding Father. Why?

Washington was a real estate developer, more than a plantation farmer who owned slaves, but more a farmer than a general, and amazingly was a better general than he was a professional politician or political thinker. He was America’s first and only businessman/general President who may arguably have been America’s best chance for sustained national independence with a veneer of unity and common purpose. The most interesting question that follows, for me at least, was why him for our First President? The general who led the Revolution certainly accounts for his mass appeal, but not necessarily for his appeal among the very divided elites of America. It was the elites that selected him. It certainly wasn’t his sense of humor, charm or personal charisma–he was incredibly remote, formal and taciturn, or his public oratory, but it is evident to me that his character, his ability to transcend the Mason-Dixon line regional divisions, and the reality he was not a professional politician with inflexible political principles, such as Adams, George  Mason, Patrick Henry, or Jefferson that made him the best choice.

He was a blend and balance of successful competence in his chosen field, land development and infrastructure, and a vision of how America’s independence could be best preserved–by opening up the continent’s interior and projecting America’s economic strength to drive out foreign competitors on our borders and generated domestic loyalty if not political unity from its population. But in the end, his defective personality, was overwhelmed by his character and integrity. For economic development that character and integrity created a role model for how public-private partnerships could work. More critically, he forged, almost uniquely, America’s first major economic development nexus by combining land development, population migration into the interior forming new states, economic bases, and policy systems, and accessing them all with the installation of developmental transportation infrastructure, made possible by venture capital and the establishment of a national financial system. The visible symbol for all that was his building, personally, of Washington D.C.–which in his mind was also destined to be Virginia’s chief port city, and gateway of Virginia’s hinterland to the world. Talk about moving parts!

And now comes the segue way.

Unlike much of current day popular histories, based on one Founding Father’s personality, this is a history that brings in a lot more. There are many moving parts in our history: political culture/values and competing ways to think about economic development; a recognition that economic development does not descend from heaven as did Moses carrying the Ten Commandments of Professional Economic Development, but rather is defined, formulated into approaches, strategies, specific programs that use critical economic development tools such as eminent domain, tax abatement, and public-private partnerships, then approved by something we call a policy system, and then implemented by some thing else we label as an EDO (economic development organization). It my language, economic development policy is an output generated by a policy system, a policy system that is grounded in political cultures of our communities and states. The United States is the aggregation of the state and local variation as expressed in the policy structures of our national government. Thank you Tip O’Neil–all (realistically a lot) national politics originates and is carried to DC by states and sub-state policy systems. Or at least it should be. We are constitutionally a federal republic.

The great joy is that when we test that approach by looking from the bottom up–from what cities, hinterland small towns and rural areas, counties and states–we depart from the Washington D.C., everything is always political, where there is one best approach that can be rationally ascertained around which an infallible plan can be constructed (there’s got to be some tension in that line of thinking, don’t you think?). From the bottom-up we see how people matter, individual personalities like Washington are critical, and how each geography in America has its own peculiar combination of different kinds of people that in some way come together to form a policy system that carries out their distinctive form of economic development. As many policy systems as there may be, we have the potential for its own version of economic development. The logical culmination of that line of thinking puts special value in understanding the role of American states, the formation of distinct state and regional economic bases that develop a two-hundred and fifty year tradition of distinctive policy systems and distinctive paths in pursuing economic development. That is our starting point in this history. There is (sadly more–we do not lack for moving parts), but let’s get started with the most important moving parts first.

In Chapter 1, the first moving part is how we managed our inheritance from our nearly two-hundred years of colonial history, and how we used the American Revolution to bring thirteen individual colonies, who viewed themselves as actual separate nations, into a somewhat coherent whole, we call the United States.

OUR COLONIAL AND REVOLUTIONARY WAR INHERITANCE

How and Why the Politics That Led to the Revolutionary War Affected Early Republic Policy Systems and American Economic Development

Our approach to understanding current and contemporary American ED is that what it is today follows from its past. Today’s ED is the logical progression of what has occurred since we became a nation in 1783 when the Articles of Confederation achieved independence from Great Britain and then “updated or reformed” itself with a new Constitution that established our 1789 Early Republic.

First things first, our initial dilemma is that 1783 is a bit arbitrary in that some States enjoyed a colonial history that reached back more than 175 years, and most started during the 1600’s. The unmentioned reality is that all American states did not toss out their colonial experience and begin with a blank slate when they entered into the Articles or the Early Republic. They inherited a great deal from their colonial past–and in their efforts to mobilize and achieve American independence as a fledgling nation-state from Great Britain, they invented some things that were adapted and carried over to the Early Republic. Most are still evident today–which is why you might want to read what they are.

The simple starting “truth” from my perspective was that the thirteen colonies in 1775, 1783, and 1789 were significantly different from one other, in ways we shall discuss. They entered into their national union in 1783/1789 as very different entities. If you want to know why each of the fifty states are today different, the easiest and simplest answer is they never were the same–ever. Simply put, much of the foundations of American policy systems and our contemporary ED were poured during the colonial period. These foundations are now covered over with the dirt and dust of history and time, and are so embedded in our thinking they go unnoticed and their fundamental importance simply part of our unseen heritage, of little or no consequence.

But Massachusetts has towns, the Midwest has townships, and the South has counties. The South did not urbanize: the North did. In 1783 the American North America had two very distinct economic bases–both based predominately on agriculture, but still radically different from each other. These are but a small handful of “the ED foundation” that had been poured before 1783. My sad fear in writing this history is that most of my potential readers simply don’t care about this “deep” history–and can’t with any stretch of their mind see how it is relevant to them. Belonging to the “Church of What’s Happening Now”, their search for their unique heritage and how their identity came to be formed is very limited indeed–usually to the smush that is taught in college textbooks and the one history course the reader stumbled upon.

Showing how history shaped today has a tough time demonstrating the past really does matter, that history does more than rhyme, it offers explanation of why thing are as we see them today. The crap we see as we look outside our windows, as well as the silly truth that we sit in the planet’s most powerful nation, with its strong economy, and now the oldest Constitution and democracy on the globe are part of that meaningless heritage that history offers some understanding. Some of us are not proud of our heritage; others of us are (I am–on the whole). But that means we do acknowledge in our own individual ways that our history does matter. I cannot understand how we can run away from it, nor can I understand how we can fear it and hide from it.

This history, filtered by its filter of topics and dynamics relevant to economic development, is a bottoms-up history, viewed from our cities, counties, hinterlands, states and geographic regions–with the national government a powerful external force, is quite unique today. Looking up results in a different view and different questions and dynamics emerge. We talk about people and events that are never discussed when we look from the top down. What the reader will read in this history is almost certainly “new”–and the change that has occurred since 1783 would look quite different because in many ways the 1783 past still continues today–dressed in new modern clothes and given different names for the identical or at least functional behaviors. Has the values system changes> You can figure that out for yourself–the raw material for that critical thinking is the substance of this history. The practice of economic development reflects a choice among values and priorities of values. Values, expressed and embedded in our political cultures, are an inescapable factor in our economic development history. So is individual character, propensity to risk-take, and to act. Individuals, for good and bad, can produce long-lasting consequences.

But enough of the lecturing.

Our initial dilemma is when to start our history, in view of the reality we inherited a great deal of really important stuff from our colonial past. I decided to begin officially with our Early Republic which was born in 1789. That is Chapter 2 in this history. This prologue as briefly and succinctly as possible culls out several interesting and salient features of the post-1763 drive to American Revolution/Independence (Did you know that some forms of contemporary Community Development can be traced to the Sons of Liberty, a colonial era ACORN or Antifa?). Chapter I  (1) provides a brief contextual introduction to the ancient history-challenged reader as to what the Articles’s relevant external and domestic environment looked like to policy-makers in Philadelphia; (2) precis our colonial economic heritage (migrations, policy system and economic bases, and (2) selects out several ED-relevant drivers and legacies as experienced by three critically important states: Pennsylvania, Virginia, and Massachusetts (Did you know that Alexander Hamilton established the Second National Bank?). Chapter 2 then discusses the formative period that was the Articles of Confederation. This prologue and the first two chapters are our feeble attempt to capture the colonial and pre-1789 inheritance to the Early Republic. From Chapter 3 on, we are in the Early Republic.

PROLOGUE: ED IMPACTS FROM THE POST-1763 DRIFT TO THE AMERICAN REVOLUTION

First: the Big Picture

All thirteen colonies existed prior to 1763–although South Carolina was ruled directly from London and the Barbados, and Georgia and North Carolina were practically new-born. They each enjoyed different policy systems, their own style of politics and possessed their own variant of a political culture. When Britain beat the crap out of France in the 1756-63 French and Indian War, and literally kicked it out of North America, its victory was so total that it seriously crippled one of the major reasons why the thirteen colonies were colonies in the first place. By 1763 most of the colonies had their own versions of an economic base, and had developed a colonial policy system. Most had some urban areas–by 1750 standards–and all were for various reasons ready to strive for political adulthood from their mother (country).

The major reason, I argue, they stuck around as a colony was self-defense; they were too small to defend themselves against hostile French armies and more importantly, Native American military alliances with the French that had been a dominant feature of colonial history. When the French and Indian Wars was over, the common enemies of the thirteen states, the single most important pillar of 1760 British colonial rule, the need for a British Army for their protection, was obliterated. With the French gone in 1763, the Native Americans (Indians) were on their own–and Britain inherited the double-edged sword of figuring out what to do with them, while integrating the French regions, Quebec for example–the entire Mississippi Valley east of the Mississippi into the newly-established British Empire. The French and Indian War was the first birth of the British Empire. North America (and West Indies) were the first geographies colored as red for the new British Empire.

Britain wanted to offer a generous peace to the Former French residents of North America, and also wanted to protect Native Americans from the hostile intentions of the residents of the thirteen colonies, who were, (1) none to happy with most North American tribes, and (2) very happy with the future potential of living on Indian lands. Clumsily in 1763, the British created a Proclamation Line, beyond which residents of the Thirteen Colonies could not go. That Proclamation Line was the key defense line of Native Americans, and west of that line was viewed by the British as some unspecified “two nations” wilderness in which sovereignty was held by both, as specified and regulated by agreed-upon treaties. The Proclamation Line was wildly popular (sarcasm in the extreme) in the Thirteen Colonies–it sort of rendered both elites and masses rather mad, at Great Britain of course. This was a rather bad first step.

The Second Step, probably even “more bad”, was to start a series of “sales taxes” on key goods and necessities, and to begin to regulate global commerce and trade with Great Britain. This as the reader no doubt knows wound up with tea being tossed by white Bostonian “Indians” into Boston Harbor in 1773. Things really went south after that, and by 1775 the thirteen states were meeting in Philadelphia engaged in their first formal collective debate to be in some way independent. That period which we concentrate on in this Section, is the period between 1763 and 1775: the Drift to Revolution and Independence.

The Proclamation Act got it started, but the real trigger for independence was the Stamp Act of 1765. That unleashed the “we had enough and ain’t going to take it anymore” horde. In true academic style we could describe the various events and how they led to 1775 First Continental Congress, but we prefer to refer the reader watch, the HBO John Adams series, based on David McCullough’s biography. The HBO series is horrible history (McCullough, if read precisely, is fine, but it sees a national uprising through the eyes of one man (and his wife) only). My version totally smushed into a few paragraphs is likely to be even worse. So I take the liberty, that’s what they period was all about after all, liberty, of culling our a few observations and takeaways so we can move on to our larger purposes.

Second Big Point: the Two Major Currents Relevant to ED History in this Period

There are two major currents evident in the events, personalities and ideas generated in this period which are salient to our ED history:

First, we concentrate on those elements which affected the formation of Articles/Early Republic state and local policy systems–which after all are the entities that define, formulate, approve, implement any ED strategy, program and tool. In so doing we call attention to the importance of “taxes” and “without representation” which mildly underscore that critical notions and expectation of what a policy system was supposed to be, and what it was not supposed to do are evident. Quickly on in Chapter 1 the reader will see economic development itself, in the form of non-importation of British goods (a sort of upside down Buy American movement) spread across the nation. How they defined tyranny will also be interesting and will carry over into Early Republic economic development, in fact it underscored Jefferson’s distrust of Hamilton’s (Second) National Bank.

The second major current which will carry over into the Articles and the Early Republic is the transition from a colonial policy ultimately ruled by a King, to the world’s first modern experience with something called democracy–and as a tertiary them how that democracy could co-exist with a rapidly emerging, still evolving economic system we call capitalism. Today every American’s DNA contains genes that produce the only acceptable and politically correct definition of just what a democracy is, or what it is supposed to be. The trouble is American revolutionaries and our Founding Fathers did not have those genes–and so they had to write their own versions of an instruction manual on what democracy meant and how it should be installed in the thirteen states. Sad and deficient as they were, they heavily influenced our history, and so we cannot ignore the economic development and policy system implications of the various state (and local) policy systems that formed during Early America before the Civil War.

The first eight years of the Revolutionary War, until 1783, when the Articles were formally ratified by the thirteen states, each state was a sovereign nation and that formed its own version of democracy, expressed in their first state Constitution. One of these versions, expressed in the Massachusetts state constitution was written and approved in 1780. It still remains Massachusetts only Constitution and as amended is in effect today. The oldest Constitution in America, the Massachusetts Constitution, is the principal reason I believe the New England (Boston) Patriots won so many super bowls. But Massachusetts if the last state we discuss in this chapter, the first, Pennsylvania, expressed the version developed by our largest urban center at the time, a center that housed the Continental Congresses that forged the Declaration of Independence and the hap-hazard first national government, the unapproved Articles of Confederation. The second state examined is Virginia–the state that led the United States for nearly fifty years, and attempted, hap-haphazardly it turns out, to implement Washington’s drive to the interior hinterland. The reason for its ultimate failure, one gather lies in a deficient policy system created by its domestic political cultures. Oh well, not everything turns out wine and roses.

In any case, after we won the American Revolution in 1783, we had to formally establish our first state-level policy system. That is when and why we incorporated our separate and distinctive colonial inheritances into our contemporary policy systems. There these inheritances largely go unnoticed and ill-understood, much like the steel bars encased in our cemented foundations.

Takeaways to look for in Chapter 1

There is lots to look for in this chapter, but recognizing that much of it is subsumed into one or both of the two currents that flow through it may be a small help. It facilitates categorization and constructs a fragile coherence. Within these two dynamic currents, one may discern several important eddies and whirlpools, rocks and rapids that are important to the themes in our history.

• One is to identify and describe the colonial inheritance, the steel bars, that were incorporated for one reason or another into our first state policy systems. If history repeats itself, colonial history is repeated into our Early Republic state policy systems. In this we will flesh out the rudiments of three distinct political cultures: the Midlands, the Tidewater, and the Yankee Puritan. One will hear about key colonial era leaders, like William Penn, John Winthrop, and George Berkeley, and George Mason and the reader will sense how these folk personalized the formation of the three distinctive political cultures of each state. One will also see how and to what degree the so-called colonial political culture, the Deference Culture, was reshaped, modified, but surprisingly continued–a powerhouse even today.
• We focus on states in this chapter, seldom mentioning major cities. Why? Because sub-state communities and governments are an element of a state constitution. As Casey Stengel’s uncle once said three years after the Civil War ended, “cities are creatures of the state“. Fear not, in future chapters urban areas will become really, really important. In fact a major thrust is how “Big Cities” took the lead in developing a new stage of industrial capitalism–but that is after how cities are first “built”. City-building will be a real obsession in this book. In fact, by the third chapter our narrative will be filled with the tales of George Washington and Thomas Jefferson (Richmond) as city-builders. Something called land development companies will be on the tip of your tongue. They are the first private/public EDOs in America. Be especially alert and compare them to Elon Tesla’s Space X and his Tesla Corporation.
• So will the first economic development nexus, land development and development transportation infrastructure (DTIS), the strategy that linked population centers and economic bases so to penetrate the trans-Appalachian interior. If I promise nothing else, it will be an obsession with developmental transportation infrastructure, the public-private partnerships that installed it, and the divisiveness it generated within the several political cultures and the policy systems that reflected them.
• Speaking of economic bases (?) it is hoped the reader will quickly recognize the 1775 United States had one predominant economic base, agriculture, with two very radically different approaches: plantation or mass production agriculture meant principally for export, and yeoman household that was primarily intended for household and domestic consumption, the excess of which could be exported. The distinction between these two forms of agriculture–and the nature of the agricultural workforces (free or slaved, voter or nonvoter) was the major cause of a pre-1775 multi-state regionalism. Not evident in this chapter is that each of these “regions” will follow its own distinctive path to economic development–and a Civil War. That these regions, and several others, still exist today suggest this dynamic will be on the top of this book’s take aways.
• What will be apparent in this chapter, however, is that capitalism in 1775 is not even close to be fully developed. In fact, Adam Smith wrote his famous capitalist tome only in 1776. Readers should resist making the stuff in this book an exercise in pro or anti capitalism. In reality, it is intended to describe, somewhat loosely explain, how capitalism developed and matured in the United States–and urbanization and urban economic bases, contrasted with hinterland agricultural bases, each with their distinctive-shaped political cultures will be fascinating, I promise.
• All this will come together in the hugely diverse policy systems that congeal during the Early Republic. The battleground will be between economic (and political) elites and the masses of average folk that are non-elites. Who controls policy systems matters because distinctive economic development policies, strategies, programs and tools will follow. The reader will probably be amazed at how central economic development issues are to policy-making structures/institutions and policy system configurations. Arguably the great political divide that created two rival political tribes, Washington’s Federalists, and Jefferson’s Democrat-Republicans was in large measure shaped by differing approaches to economic development. By the end of this chapter we will stumble into the dread topic of populism–what is it in our view, and equally important how does it affect ED.
• What will only be hinted at, however, is that the drift to partisanship and political party systems will also affect the conduct, goals and practice of American ED. That topic will be evident more after 1800 when American ED splits into two approaches: Mainstream ED (MED) and Community Development (CD). That will be a dominant stream in Part II of this book. That divide is arguably today’s most important characteristic of American ED. In this chapter I will talk about folk like Thomas Young, Sam Adams, Patrick Henry, Thomas Paine, Benjamin Rush, Trent Coxe, Daniel Shays, and contrast them with the likes of George Washington, Robert Morris, Benjamin Franklin, John Hancock, and John Adams. You will also see colonial, Revolutionary War, and Early Republic Think Tanks and Policy Institutes. See in that contrast the foundations for the split in American ED.

There is an awful lot to take away from just this first chapter. So pour yourself a bourbon and settle in.

 

Module 2

1783-1789

With war’s embryonic end in 1781, all thirteen states finally approved the Articles of Confederation, and for what it was worth, the United States had their first official national government.

 

The world had turned upside down not only for Cornwallis’s army and the British–but for the “Americans” as well. The United States, more precisely each of the thirteen states, were nations–which had formed a confederation which, in effect, borrowed state powers to coordinate foreign policy, the administration of the “trans-Appalachian west” ceded to the United States by the Treaty of Paris, and matters which involved several states. The national confederation government was a super-legislature with no executive branch to speak of, and on vital matters such as taxes, without which a government is quite limited it was dependent on the states for payment of tax revenues. Delegates to the Confederation Congress were elected by state legislatures.

Virginia was the first state to ratify the Articles of Confederation (December, 1777), and Maryland the last (February 1781). Maryland would not enter the Articles until Virginia agreed to cede its claims to the western territories to the Articles–which Governor Jefferson and the Virginia state legislature did on January 2, 1781. When the Treaty of Paris was signed in September 1783, the Articles assumed jurisdiction of the trans-Appalachian west ceded to it by Great Britain. The West, the Continental Army and foreign policy for the thirteen states were its principal functions.

Franklin’s 1754 “Cartoon: fr National Unity

It is useful to think of the Articles as a transition national government. When the Treaty was signed there existed no consensus among and within the thirteen states as to whether a non-confederation national government should even exist, never mind what powers should it have, and how was the national government framework be structured. It may be that America was about to enter its brave new world, but it is far from clear very many in 1781 to 1785 were prepared to leave their old one. Each colony-state was a very comfortable womb. But whatever were the comforts of the known, each state was in 1783 its own version of basket case.  Each state shared at least two problems. Each state was fiscally “broke” in varying degrees, and each was consumed with its own “politics and policy”.

Most states had a European power on their western border–and all states were bordered by a Ocean dominated by these powers. Each state had an economy tied to Great Britain–but only marginally, if at all, to the other states. No state was in any sense prosperous in some golden period, and each state was in varying degrees and ways divided and opposed to itself. Strangely enough the politics of revolution subordinated class interests, such as existed at any rate. Elites and masses co-existed and worked together in a common cause–which in 1783 reached the worst possible conclusion: it was victorious.

No what do we do; like the large dog that caught the Volkswagen “bug”–how do I even get in the thing, never mind drive it.  So each state in its own way realized it could not go on its own way. But how and in what form and to what degree could they join together to avoid death was a touchy-feely process indeed. This ambivalence proved no gold mine for historians, economists and political scientists so we are left with very little thought as to how we evolved to the 1789 Constitution and the Early Republic. It is very important to our history–very important.

America’s First National Government

There was no sense, in these early years especially, that the national government should take the lead in its own affairs and the states should follow. Rather the creation and definition for this national government lie in the hands of each of the thirteen states and that meant government creation by committee. Not a particularly hopeful prospect. The French found a better prospect for forming its national state: elites seized power by coup, killed their rivals, and anyone else that they didn’t like, only to be overthrown by another coup which repeated the sequence. Napoleon did the same and then conquered Europe, only to be conquered (twice) in return. Millions died and the industrial revolution prospered and it is not sure that Revolution is yet over. France still reflects the division of 1791. That evolution, the Uninterrupted Revolution, I think, historians prefer. It certainly produced better music, and a lot high falutin concepts and ideas.

Today we look back and think of American nation when we think of the War of Independence; it was not. It never was what the French Revolution proved to be a national revolution from the top down. Our revolution did not start from a capital and spread out to the regions. It was a drive for independence from a mother and founding nation conducted by its thirteen squabbling siblings who possessed a rather rudimentary commitment to the new nation. While sharing some complaints, each colony entered the war of independence with its own distinctive complaints against British colonialism–and no common shared aspirations of world vision, excepting of course bumper sticker concepts like freedom, liberty, and the ever popular, no taxation without representation. Not that we like taxation with representation! The same could be said for tax abatement and the ultimate deprivation of freedom, eminent domain.

I’m on a rave again–but maybe the reader might suspect it is not a rant exposing the narrow base of support for a national government in 1783.

We failed, however, we interrupted our Revolution, mostly because we were woefully unprepared for Act II in our transition to Democracy. We had no Plan B after the Revolution. Everybody went back to their respective bars and taverns, had a drink–and then another.

So decentralized in its thinking and mentality, the Articles were an afterthought–not an aspiration. Colony-now state was the core unit of the Revolution and it remained so under the Articles. Indeed, the Articles were formally incorporated only in 1781 after Jefferson, under the immense pressure of Virginia becoming a major league “battlefield”, signed off Virginia land claims over the trans-Appalachian west, removing the barrier to Maryland’s, the last state, approval of the Articles. For all practical purposes, the Americans had fought a full six years of a war of independence without an informal national government.

In 1781, that changed and states now had to deal with, for the first time, the prospect of some sort of a permanent national government. It was then a government of convenience, a sort of tornado room where each state dumped its most insoluble tasks and functions, a place with no entrusted powers or resources, i.e. a place where for the most part one could talk and approve legislation with little more than paper substance. Or not. As one might expect unsolved problems don’t really go away; they accumulate, and multiply, and beget other problems–sort of like the American national government after 2012. At least the Articles, like the states, were broke. We had yet to manufacture modern monetary theory.

Returning from my rant, acceptance, of a national government would prove to be as much a “revolution” as was the colonial revolution against Britain. As much as one hundred and seventy-five years of separated, distinct, and geographically isolated historical, cultural, and economic experience had to be conflated in order to create a “Union” to make these separately conceived colonies a nation. At this point it becomes more evident, I hope, to the reader how my original question which motivated my American state and local economic development history (Why is economic development similar but so different in each state) rises to the surface as soon as we became a nation.

States are different because they always were different. You can only see this if you look from the bottom up–from the point of view of the states. Now the reader can see we have to at least start this way; it was the states that mothered the national government. Not the Constitutional Convention. It was to be the states that mothered the national government until it could assert its own autonomy. We call that the Civil War. But let’s not get too far ahead of ourselves. Just a glimpse into the future.

The answer to why states are different today is simply because each state preexisted the national American Republic. One can see these separate colonies conflating their history and economy and values into little plans, the Virginia Plan, the Rhode Island Plan, and a variety of other plans, like the Federalist papers as we would later forge the Constitution–but how did these folk get into that room to talk about these Plans? In the module that follows we shall see how Virginia, more precisely Washington, blazed a trail to Annapolis and Philadelphia. But first let’s put the 800lb gorilla into the room. The states were different when they entered the Union, and the form of the Union, a co-sovereign federal union, was the price paid to become an American Republic. States are different today because they always were different–and have since chose to preserve and evolve their differences in a federal union. So today there are at least fifty-two (fifty states plus Puerto Rico, plus the national government) systems designing, formulating and, approving, and implementing state and local economic development programs, strategies in response to fifty-two different sets of goals, and autonomous policy system. That this is likely true of most policy areas (welfare, criminal justice, education et al) in varying degrees demonstrates the impact of a nation becoming a nation from the bottoms-up.

Still within the confederation, each state retained its own image of the future and considerable reverence for its historical, economic and cultural past. Herein lies the basis for America’s Great Policy Fault-line, a fault line that began in the effort to reform the Articles of Confederation–and still continues to this day: the right of each state vis a vis the federal union to practice its vision–and version–of, in our case, state and local economic development. You want a national industrial policy? Great! Then eliminate the fifty states. You want to eliminate tax subsidies to business–Ditto. End inequality, likewise. When you’ve done that, let’s talk.

As it turned out the Articles did play a major role in the future of the Trans-Appalachian west (the various pieces “Northwest Ordinance” legislation the most known), and its foreign policy involved key economic development related issues: tariffs, free trade, slavery, and the opening of the Mississippi River. The Articles did attempt to manage Indian affairs, at a superficial level. The burden of American governance devolved to the thirteen states–each with their own Constitution, policy system, and system of sub-state governance.

This is salient explanation of our bottoms-up approach to the history of American economic development is so logical. It was the individual states that in 1789 established a national government through approval of a Constitution by referendum in each state. The United States came into existence from the bottom up, not the top down.

Formation of Two Tribes: the Plot behind Lord of the Flies

All of a “sudden” in the transition period after war’s end, each state had to deal with a real and potential reality that the other states mattered. Policies and strategies that were peculiar and distinctive to each state–for instance economic development, the nature, composition and growth of their economic bases, slavery, settlement of the trans-Appalachian interior, foreign trade, free or protected trade all exuded implications from and to the other states. Now that they lived under the same roof, the individual “habits” and behaviors of each member of the household mattered and a “household” feedback loop sprung into existence.

As each state confronted the host of problems that descended upon it after victory, it became painfully evident that elements-powers that only a national government could provide were a way out, a solution to these fiscal, budgetary and inter-state coordination. Inevitably, as each side’s proponents began to formalize their issues, concerns, and develop sets of strategies, they gravitated into two “tribes”, the Federalist with a stronger national government, and the anti-Federalists, with a weak national government. As it turned out, commerce, the need for and desirability of, was a major dividing line between these two tribes. It wasn’t so much that anti-Federalists rejected commerce, trade, and manufacturing (the were all tied together within the 1780’s definition of the word “commerce”, it was their primary economic base, agriculture, did not require as much–it was secondary, whereas with the Federalist it was primary.

If one were concerned especially about national defense, than the manufacture of cannon, rifle and gunpowder, the construction of roads and a Navy with its own home-built frigates and ports were not luxuries but necessities–as they still are today. The British victory over the French in the French and Indian War removed the need for a British army in America but victory in the American War of Independence meant the U.S. had to create one–and arm it and supply it across the thirteen states and its western borders. All this seemingly required a strong, centralized (relative to the times), dominant (at least in Hamilton’s view) national government. But for many, Patrick Henry for one, Sam Adams for another. George Clinton (New York), Thomas McKean (Pennsylvania) that was a bridge too far. These men, and many, many others, wanted to address these problems and issues at the state level. They had not fought a war for seven years to replace one outside hegemony with another. They fought as Virginians, Pennsylvanians, Massachusetts “Yankee Doodles”, not Americans–and many believed there ought to be a way to resolve these concerns and issues, using a national government as minimally (confederation) as possible.

It was economic issues that drove the formation of a national government, not political need. There were not masses of citizens swirling around seeking political freedom and individual rights brought about by a national government. For the most part, the masses were comfortable with an American Dream requiring western migration and settlement, or working out an acceptable democracy for the existing thirteen states. It was not evident they needed to pay taxes to a national government to achieve either goal.

The support for a national government came overwhelmingly from elites, rather a segment of them, that saw the need for a different economy than homestead agriculture–and others among them realistic to the reality that our independence in a hostile world surrounded by European powers, Native Americans, and a global economy dominated by the former was very fragile indeed.

Moreover, if we wish to grow, another way to say “make money”, we would inevitably require their assistance, willingness to work with us, or at the very least resist the impulse to end our fragile independence and take us over again, economically, politically or both. If we wanted–or needed–economic growth the thirteen states had to create new “institutions” (think currency, rule of law to regulate interstate commerce, and legislation to promote it). We would need a financial system shared by the thirteen states, not thirteen financial systems. We needed a common law that would allow entrepreneurs from one state to apply their innovation and to sell their goods and services to another. We need what shall be called in future chapters “institutionalization” of legal and economic structures and processes to solve these needs.

Around these economic concerns assembled a segment of each state’s elites that for their reasons believed that the Articles of Confederation need be reformed. It was a byproduct of this grouping of elites, the Federalists,, that the dominant wing (at least until 1970) of American economic development would evolve.

That was the basket of needs, conflicting goals, and nexus of political fears that was triggered by George Washington’s Potowmack Canal venture/strategy. He, perhaps alone as the most national figure common to the thirteen colonies that served as a protective shield and catalyst for the forces in each of the thirteen states that wanted a national government. Around him and his project, around the man that a few years earlier had Cincinnatus-like relinquished his military command in order that democracy, individual freedom and independence could function. That his plan also revolutionized the Virginia economic base, also tapped into the Federalist-anti-Federalist conflict. Only his presence could peel off moderate anti-Federalists to join with him and push for a strong national government. This alliance of Virginia moderate anti-Federalists and Federalists proved short-lived (by 1792 it was over), but it was sufficient to the development of the Constitution of 1789–and its approval by the thirteen states. If so, there is a definite link between George Washington as Father of his Country, and George Washington as Father of American economic development.

Back to the States Again: Origin of the Great Fault Line

So far the going has been easy, and light–but now we must delve into some conceptual tensions that underlie the formation of the national government, American federalism, and the two different visions of quo vadis that Federalists and anti-Federalists forged during the transition period of the Articles. I alluded to the deepest tension that manifests itself throughout our history of state and local economic development; I called it the Great Fault Line. The Great Fault Line is given birth in the resistance of the anti-Federalists to the Articles of Confederation “reform” that escalated into a full-scale revamp of the Articles themselves, recasting the Articles into a full-fledged national government with sovereignty shared with the states.

Of little concern to most of us today, the Civil War and time itself, not to mention economic change and a host of other factors and dynamics, made this topic of concern moot, if not a dinosaur. The reality is, however, that the origins of what we call states’ rights, a reference by some to a federal policy system decentralized as much as feasible and constitutional to the states remains today a durable, if variable, hallmark of our policy processes. The Great Fault Line has particular relevance to economic development since it is not specifically delegated to anyone in the Constitution, and thus, ill-defined as it has always been, buffeted about by clashing expectations, court decisions, events and public/media opinion.

In the good old days previous to the Civil War the strongest argument of those in favor of a state-dominant policy system rooted itself in a rejection of the Founding Fathers assertion that the will of the people, popular sovereignty, was the basis for legitimation of the Constitution itself. In contradiction to anti-Federalists who asserted the Articles were a compact among the thirteen states, from which limited amounts and highly specified authority was granted to the confederation, and required any change of which to require the unanimous consent of the states. In 1788 the anti-Federalists refused to acknowledge the right, and the specific decision to authorize the process to ratify the Constitution, claiming the Constitution itself was beyond the authority of the Confederation to authorize, and the ratifying process required only nine states to concur [999].

As to popular sovereignty If this makes any sense, anti-Federalists claimed that the Constitution and the Federalists had asserted their right to act “in the name of the people”, but the ratification process they adopted only indirectly involved the people, and what they created, the Constitution, was certainly not a government “for the people’. They stopped short, at least the moderates did, in calling it a policy coup d’état, but they felt strongly that the Constitution (which the reader should remember did not yet include the Bill of Rights) did not protect the civil liberties and individual rights “of the people”. The Constitution established a strong national government that did not in fact represent what “the people” expected from the Revolution, but actually “interrupted” the Revolution and diverted it along a different, elite-driven path–leaving the people behind.

The people’s revolution was considerably more egalitarian than most state policy systems, and the federal government created by the Constitution was likely to be a vanguard for further interrupting the American Dream contemplated by most–the basis for which they fought the Revolution. The Interrupted Revolution will be a constant theme in the modules of this volume. The Bill of Rights got the Constitution approved, but the struggle pertaining to the Interrupted Revolution continued, and picked up steam, until it brought into power, a gentleman named Jackson, Andrew Jackson, a half-century or so in the future.

At the rump session of the Articles which authorized the ratification process, several influential delegates, George Mason, Eldridge Gerry, and Edmund Randolph (Washington’s first Attorney General), two of which were Virginians, refused to sign the document. The ratification process was highly contentious, bitter in some states, and rejected in Rhode Island (until the state did it over with a 1790 state convention instead of a referendum which rejected the Constitution in 1788). A compromise was informally reached in a number of states (Virginia and Massachusetts being two) that brought a number of anti-Federalists to pull back their opposition. That compromise was the rapid insertion of the Bill of Rights into the Constitution; it was intended to protect civil liberties and due processes which did not resolve the issue of whether the Constitution was in fact a compact between states or an exercise in popular sovereignty.

That issue remained an open sore to haunt us to the present day. Whatever constitutional scholars and Supreme Court justices, not to mention the media, politicians and public opinion will assert at any point in time, even the Civil War itself failed to cement over this great chasm in our political and policy system. It is an unwritten section of the American Constitution, a section that demarcates how American Federalism is conclusively defined, allowing us to have the better and worse parts of both the Federalist and anti-Federalist positions [1]

We can argue like hell, until the cows come home, we can assert “truths” and “facts, and judicial decisions and constitutional legal opinion all we want but two-hundred and thirty-two years later I can read the paper most any morning and find some evidence the Great Fault Line has been restive the day before. I can also detail, and I will, the incredibly persistent impact this Great Fault Line has, does, and likely will have on our economic development history. Settled law or not the Great Fault has unsettled our history dramatically over our history.

Back to the Federalists and anti-Federalists Again

This is getting old, the reader is no doubt thinking. No doubt, but there is further need to introduce readers to pertinent topics that will appear in future modules. During the transition period associated with the Articles of Confederation Mainstream Economic Development came formally into existence. Community Development is a more complicated discussion, but we will even have a word or two, perhaps three on that matter–involving a fellow named Thomas Jefferson.

During the 1780’s the full impact of the Industrial Revolution and capitalism washed ashore from Britain. Of course, a certain level of industrial, finance, logistic capitalist debris–including British tea– had periodically littered our colonial beaches, but in 1783 we had no longer had the luxury of being dependent, but of necessity had to decide for ourselves what we thought of this stuff, and decide what, if anything, we wanted to do with it. The same could be said concerning that horde of ethnic migrants/immigrants squatting and moving into the western counties of the new states. Poised to pour over what passed for state borders into the new Articles of Confederation/Early Republic administered trans-Appalachian “West”; these folk were effectively beyond the control of the new state governments, and in many ways were a distraction to the core policy system. George Washington’s economic development paradigm had jelled sufficiently to recruit many a Virginia Founding Father, and his fear these western migrants, unless tied economically to the East, were a serious national defense liability was not easily dismissed–in fact the more one knew those folk massing on the western perimeters, the more likely one was to believe him correct.

Something had to be done to incorporate these agriculture-leaning American Dreamers into our national economy. They also had to be brought into, and given a role and an identity so they could also fit into our new American democratic republic. It is fitting that someone of considerable statute as Jefferson would venture his vision of the economic role and value of agriculture in the economic base of the new Republic, and in passing, establish an identity for them as political actors in the new policy systems of the trans-Appalachian west.

Manufactures

Undisputedly “economic” in nature, the debate was especially prominent among elites as one would naturally expect–but it also involved the average person. The 1780’s was a difficult economic period for the thirteen states. While it did not cause a depression-level economy, it did evidence a troubled one, with lots of nasty stuff affecting lots of people. In today’s language some clusters took a hit–shipping and trade, commercial maritime trade, and agricultural export were undergoing considerable stress, displacing and marginalizing people in their wake. A letter to the Massachusetts Centinel editor on August 2, 1785 captures the disruption created by our becoming an independent nation:

During our existence as a dependent people the extension of manufactures in this country was of less importance than at present [since] the various markets then open to its commerce, afforded a sure demand for its exportations: and the inhabitants of it found constant employment in the production and transportation of commodities, But the United States had assumed a new political station and experience [n ow] demonstrates that it had to adopt a correspondent alteration in its internal economy as the markets for our produce reduced in number; and certainly our navigation is depressed [2].

It seemed that “hard times” and economic change elevated economics and economic development to the highest ranks of the American policy agenda. That, the reader can be sure, is far from the last time she will read that in our history.

The “laboring poor” as Franklin called them were especially hurt by the weakened economy in transition. Many fled to the backcountry west where they fought Indians to some extent because they had “nothing more to lose” by leaving their hovels in the East. Hard times hit the early Big Cities hard as well, swelling the poor rolls, loitering and littering the streets, and making all more susceptible to diseases. The Eighties were wracked with several uprisings, the most notorious of which, Shays Rebellion, probably did more to cement the consensus of the Federalist Tribe than any other single event in the period. In the minds of many elites, rule “by the Mob”, Washington’s words (and he capitalized Mob), was a very real possibility.

During the Articles transition, these and other factors prompted a discussion about what they called “manufactures”, a discussion that applied to both their local and national economies. This discussion was rooted in the way colonial (and British) Americans defined and valued manufactures–what their place was in the overall economy, and their value to a local economy. That colonial, now American “way of thinking” is far removed from our contemporary perspective, even though many of the same labels are employed. Accordingly, before we embark on the Early Republic period, we need to introduce Early Republic manufactures to the modern reader.

Whatever manufactures were defined as, they constituted a small portion of the colonial-Early Republic economic base. Philadelphia and New York City had more than their fair share, but outside the coastal seaports, manufactures had a distinct rural cast and were tied to agriculture: grist mills, forges for nails, barrel-makers, rope-hemp makers, shovels, axes and plows, stirrups and saddles–and rifles/gunpowder. There was some raw metals/minerals mining-related enterprises (salt, sulphur, ore) sporadically spread into the hinterland.

In short the reader should dispel themselves of the perception that outside the cities, manufactures were not to be found. In the cities, Philadelphia especially, a vibrant, if small, artisan-manufacture sector flourished, and in New England coastal areas a lumber and shipbuilding (broadly defined) formed what was undoubtedly a colonial era cluster. New York City, and Baltimore also had developed robust port facilities with adjoining manufacture.

Manufacture certainly aggregated in cities, and its role in the local economy, transcended local needs allowing it to be exported to the hinterland or even abroad. During the drift to Independence and the War, non-importation was a major resistance strategy/program by each state and implemented by non-importation committees in towns and counties; among its goals was the development of American manufacturing capacity. Buy American, as we discovered, was not a byproduct of our 1980’s deindustrialization period. It would not be a stretch to consider these as the very first American EDOs–if it weren’t for those obnoxious land development companies and lending institutions. In any case, these “appliances, conveniences and tools, were seldom included in the definition of manufactures by either the average Joe or commentators of the period. They were “homespun” household goods, necessary to life and produced on the small-scale by craftsmen and artisans in small shops, were not a whole lot different than craft guilds and their membership had been in medieval times. They were natural and necessary, and their owners and valued employees were thought of urban yeomen. They were not the “manufactures” of which we discuss. Let me also make another point, they were not the “manufactures” which Jefferson railed on against, and which we shall discuss in the next section of this module.

What manufactures meant in the 1780’s were the large scale enterprises, what we will call factories, that infested British cities, and along British rivers. What those noble facilities had done was provide jobs for a displaced rural population that had fled to cities for the lack of anyplace else, and who dwelled, if that was the word, in abject poverty under conditions which Dickens (who wrote fifty years later) could not have dreamed. They transformed these cities into pollution-ridden smoke and chemical dumps, and the housing of the workers were ghettos in every sense of the word.

The folk that worked in these mills and factories were desperate, illiterate,unskilled in the arts and sciences of machines–simply brawn and brute labor, treated as such, and sadly often thought of themselves as such. Conceptually, they were refugees from the hinterland, the landless poor (excluded from the policy system), and when agitated–the Mob. So when Jefferson (or even George Mason) articulates his concern regarding urban life, cities, and manufactures, this is what he is fearing–and he is not at all an economic dinosaur resisting inevitable progress for doing so. If that was a representation of industrial paradise, than God help us.

But at this point the story about manufactures gets really complicated. The thing is that during this period jobs in “manufactures” were considerable desirable whatever it was they produced–useful products-commodities or negative externalities. Manufacture jobs countered the consequences of having a horde of poor landless aggravated unemployed–with no prospect of ever being able to return to the land and farming from whence they came. They no longer had an economic future, and their numbers were swelling with each year, and clustering in large cities they produced open sores of poverty and depression and a real threat of political instability–an urban “were-not-peasants anymore” rebellion. In England, copied in the larger cities of America, there arose in response what today would be considered a job-creating economic/community development program: workhouses, manufactories, and state/Royal chartered manufactures.

These private/public enterprises employed (housed, fed, and buried these urban wretches found in their cities. The Royal chartered manufactories were particularly infamous because they were created by the King (or the national government) to produce luxuries deemed necessary for the “Court” and the King (the political elites). The produced much of what filled up the castles and palaces and government buildings: drapes, furniture, bedding, chandeliers, accessories we call them today. They were luxury goods, meant for the elite and paid for out of taxes. They were derivatives of the infamous English Poor Laws which had been applied since the days of Elizabeth I. Early pre-19th century manufactures were viewed therefore, on the whole, as a good thing–but as an economic development response that was designed to address a much worse problem then was created by the economic development program. The issue in America is that we had a surplus of land. The urban poor could, and did, head west to return to the land. We were a “young Republic”, and we did not need the large cities and manufactures that the Enclosure Movement had generated in Great Britain. No less than Noah Webster (in 1785), the dictionary guy, had an opinion on the subject, and you can bet it found its way into his dictionary:

The people in America are necessitated by their local situation to be more sensible and discerning, than nation’s which are limited in territory and [therefore] confined to the areas of manufacture. … In countries thinly inhabited or where people live principally by agriculture, as in America, every man … makes a variety of utensils, rough indeed, but such as will answer his purpose–he is a husbandman in the summer and a mechanic in winter–he travels about the country–he converses with a variety of professions–and thus becomes acquainted with history [which then included economics–unlike today where the former would not touch the latter]. This will always be the case in America, so long as there will be a vast tract of fertile land to be cultivated, which will occasion emigration from the states already settled. [Therefore] Knowledge …[ will be] diffused and genius roused by the very situation of America [3].

The problem is that post-Independence 1780’s United States could not rely on those despicable (dare I say deplorable) British cities, with their factories, externalities, and displaced rural poor. We could no longer depend on their import of goods and stuff from the British, nor could we afford them. Moreover, even with much land, cities were growing, and with a swelling population we needed to produce on our own, rather than import, what the British factories produced for us. “Indeed, the pressure of population growth on a limited supply of land in some eastern areas of the United States, especially in New England, seems actually to have created by the 1780’s a situation of “crowding” with an increase in social stratification, a growing concentration of wealth, and the development of a more visible and mobile class of poor people”:

Since fathers no longer had it in their power to give every son a suitable tract of land, many young Americans were forced to move prematurely, and unprofitably west into uncivilized subsistence areas. Unless alternative employment in manufacturing was provided … America would continue to leave its ‘own poor to wander in the woods and wilds of the back countries to live like Indians, and to be useless to our governments … It was utterly insane to continue to employ manufacturers at several thousand miles distance, while a greater part of our own people are idle, or employed to very little purpose’ … The promotion of domestic manufactures … was the necessary means of making Americans into an active, industrious and republican people, as we shall deliver them from the curse of idleness [4].

In the United States, for example, we imported a good deal of Royal Chartered manufactories output: furniture, high value clothes, silver and tea pots, and stuff. The Virginia elite was not alone in living off British luxury imports. In America, it was not uncommon, therefore, to link luxury products created with public subsidy, with manufacture. Yes the mills could make slave underwear, but they also made fashion underwear for Martha and George (did George really wear underwear?).

In the minds of many, the link of manufacture with the luxury products was a bit distasteful and an extravagance in which the young Republic should not indulge with public subsidies. In the parlance of the day, this was a form of “corruption”, a manifestation of corrupt “court politics”. Balance of payments–i.e. being able to accumulate capital in the United States and pay off foreign debt almost compelled us to “scale-up” the capacity of our artisan shops, whether we wanted to or not. As a fragile independent nation we no longer had the luxury of being dependent on British cities and industrialization; we had to develop some level of capacity in large-scale “manufacture” to survive.

Or did we?

The debate that followed on manufacture, a serious debate between Federalists and anti-Federalists, grew out of the transition discussion of the Articles period. By 1785 the American commercial sector was laboring, under considerable stress, and as a core growth sector weakened, the obvious counter strategy, further diversification of the economic base, gained credibility. Webster’s view that American should content itself with household manufactures, avoid luxury and factory-based manufacture, probably typical of most American’s view, came under attack from large commercial seaports. A Philadelphia committee in 1785 adopted a resolution meant to address that city’s commercial recession:

That as agriculture and manufactures are the great employment of the people, and constitute the wealth of a country; and that as the former must decline with our export trade; it becomes necessary to expand the latter. … We have already glutted every foreign market; let us turn to manufactures [5].

At the very time concern that the Articles government did not possess the capacity to manage, certainly not promote national economic growth, concerns were also rising that the newly created American economy needed attention required states to cooperate in pursuit of larger economic needs shared by all. Economic development, broadly defined, was fast assuming a prominence in the national and state policy agendas. Underneath the conversation and concerns regarding manufacture was a host of other concerns, ranging from patent law–innovation–to how to deal with rising urban unemployment.

The western ethnic migration was about to spill over and create its first land boom in Kentucky and to a lesser extent, Tennessee. In that instance, the opportunity that could be associated with a consequential and sustained migration and settlement required an Article’s government with greater capacity–and legislative coherence. By that point, the Articles was constantly troubled by an inability to maintain quorums, and its constant pilgrimage from one city to another, further diminished its legitimacy and ability to sustain a consensus over time. When Washington began to publicly criticize the Articles in his letter-writing, and his urging of Madison (one of Virginia’s Article delegate) to pursue reform efforts, the matter gather further momentum. 1786 proved to be the year which many states and their decision-makers were willing to sit down and chart a course for this new national government.

Thomas Jefferson and Yeoman Agriculture, Manufactures and Cities

With the end of the war, the restive ethnic migrant-residents on Virginia’s western counties were beginning en masse their exodus over and into the trans-Appalachian West–taking their coastal and Piedmont English lumpen-proletariat with them. The British were not cooperating with the resumption of trade, particularly tobacco trade to England and West Indies–until their merchants were paid debt that was owed them in accordance with the Treaty of Paris. We did not have sufficient hard currency to pay those debt–and the veterans from the Continental Army were claiming the western land grants as payment for their service, again because we had insufficient funds to pay them in currency of value. There was a recession across the nation–and the Loyalist exodus during these years only made the economy that much worse. These fiscal and currency problems were only the tip of the proverbial iceberg.

The signing of the Peace of Paris did not automatically create a national public opinion, nor did it create an American identity–Yankee Doodle had little attraction in Virginia where Yankees were not much liked. In fact as the Articles grappled with the “western problem” it became very clear that a consensus among the states on the desirability of western expansion was fragile at best, and in reality there existed a powerful counter movement in the eastern coastal cities, New England’s especially, that western expansion drained the coastal workforce of cheap labor (Hamilton for one) there were others concerned with “crowding” of urban areas, while  others feared western settlement and disputes over use of the Mississippi River would be a threat to commerce and foreign trade (Jay).

The Northwest Ordinance legislation did diffuse temporarily concerns about slavery in the west, it also became clear by the mid-eighties that the hot area of western migration was not Ohio–which no one could as yet get to, but rather Kentucky, which had just been opened up by the likes of Richard Henderson/Daniel Boone and others–an area outside the Northwest Ordinance boundaries–an area that potentially if managed well would benefit Virginia–as Kentucky was its westernmost county. That latter dynamic offered an opportunity, both personal and conceptual, to one of the state’s foremost political leaders: Jefferson.

Jefferson entered into this debate concerning manufactures with his famous, and only published book, Notes on the State of Virginia. The book was written over five years, and was originally published (1785) while he was in France as Articles ambassador. Jefferson’s wide-ranging comments, from specifics to thoughts bordering on conceptual theory, were focused on Virginia (society, government economy, slavery and the black race, climate et al). It may have been Jefferson never expected the book be read in America, and it did take some time to get here-but the literature that it spawned is considerable.

In this section, I will focus only on his comments regarding manufactures, agriculture and cities. My goal here is descriptive, less analytical or philosophical, but have felt compelled to insert them into this history as (1) a sort of economic development intro to Jefferson, and (2) an intro to his views on these key issues that will be critical in these future chapters–after all, he is the founder, at least co-founder of the Democratic-Republican Tribe, and the arguably as key a President as Washington in the Virginia Dynasty.

In the modules thus far, until we discuss his activities as the second governor of Virginia, we seemingly associate Jefferson as a confidant and a political operative of Washington in his economic development paradigm. Although Washington was older, about ten years, Jefferson was a rising star in Virginia during the drift to Revolution, at which time he was a student in Williamsburg where he met and became a protégé of Governor Fauquier, and Enlightenment doyen and professional administrator, and director of “colonial corporations”. Jefferson had other important Virginia influencers, including his noted teacher at William & Mary.

Jefferson, I believe correctly, was never a protégé of Washington, although it is clear in these years he was trusted and valued, it also may be they were not close friends. It is certainly clear Washington and Jefferson were different personalities, followed distinctive career paths, and while they shared a great deal as Virginia oligarchs–including land development, western settlement, port cities, and canal infrastructure, Washington approached these matters first hand, Jefferson conceptually–the farthest west Jefferson probably got was today’s Harper’s Ferry.

Jefferson’s father was a frontiersman and a founding Piedmont plantation owner who surveyed the Shenandoah, founded a plantation from scratch and obtained some notoriety as a Indian-fighter. As I am fond of saying, his son Thomas was no chip off the old block–in no way meant to disparage either; they were very different father and son. But Thomas did suffer greatly from tobacco economics, and his father a founder of the famous Loyal Land Development Company no doubt exerted an impact on Jefferson’s life-long commitment to Virginia’s opening up of the trans-Appalachian west.

Thomas was an oft-times investor, as was his protégés, including Madison. That Jefferson was an ally of Washington in the latter’s efforts to secure Articles support, and support from the Virginia General Assembly there can be no doubt. But as several of his Notes on the State of Virginia indicate, Jefferson had his own vision of western settlement that differed materially from Washington’s.

The first was in regards to their commitment to cities and city-building. Washington, who certainly should not be considered an urbanophile, nevertheless saw their uses–as apparently did Jefferson: Washington wanted Alexandria as Virginia coastal port and in due course he was Washington D.C./Alexandria city-builder; Jefferson not exactly Richmond’s city-builder, designed and laid out its governance public buildings–and for two years was Washington’s go-to man in building the Federal City. Their differences, however, became apparent, however, in Jefferson’s post-1800 role in the development of the Federal City during the Virginia Dynasty.  In any case, Jefferson observes in Notes that “the Mobs of great cities add just so much to the support of pure government as sores do to the strength of the human body”. This view apparently was never abandoned in his life, and Elkins & McKitrick describe his approach to cities as dynamic forces which congealed in an dense urban center that were “foreign, unnatural, and corrupting to the morals of his fellow citizens” [6].

Perhaps needless to say, Jefferson took a rather dim view in regards to “manufactures”, as defined in our module. To make it clear, however, he did not oppose “necessities” and homespun manufacture. In Notes he relegates large-scale manufactures to others: “let our workshops remain in Europe”.  Obviously Washington’s thought on that matter, considering Hamilton’s latter legislation, were vastly different. Jefferson, as probably most are aware, threw his support to an agricultural economic base, with as limited manufacture and financial institutionalization as necessary. By default, however, free trade and import from Europe were critical to his approach to economic development, as they were to Washington.

Finally, the core unit of the American agricultural economic base was the yeoman–husband and small household–farmer.the yeoman imagery draws attention to his model, rooted in the manor days of yore, conceding however, land ownership to the husbandman. Ownership was a positive feature as that linked him economically to the viability and proper governance of the surrounding policy systems. His stake in the economy and politics inhibited his corruption, and fostered his autonomy from corrupting influences.

The concept of corruption, associated with the court politics of English partisanship, was central to Jefferson, and it will appear in future modules as well. No doubt the yeoman was a Weberian pure type, a romantic metaphor for an approach to policy-making (economic development) that was central to his values, emotional makeup, and approach to government. His comments in the Notes establishes his commitment to yeoman agriculture as early as 1783:

Those who labor in the earth are the chosen people of God, if ever he had chosen people whose breasts He has made His peculiar deposit for substantial and genuine virtue”. .. the existence of that virtue which resides in agriculture and in its practitioners seems to depend in an almost mathematical way, on a corresponding lack of it in everything and everyone else. .. Generally Speaking the proportion of the aggregate of the other classes of citizens bears in any State to that of its husbandmen , is the proportion of its unsound to its healthy parts, and is a good enough barometer whereby to measure its degree of corruption [7].

So much for a diversified economic base! But if he does not stand out as an economic developer, one can suggest he does play a major role in defining a major rural-oriented economic development strategy that rests upon agriculture–and he identifies the central unit of the policy system that underlie that economic base: the yeoman farmer. He is but one step removed from linking that approach to the consummate rural economic development strategy that will dominant the United States and its approach to economic development: homesteading. It is in the Northwest Ordinance, of which he is a primary author, that we will see more clearly how close he came to laying the foundations for that rural agricultural economic development strategy–a strategy that borders on, and overlaps into, community development.

 

End Note

[999] The Great Fault Line results from at least two separate realities: how/why we formed the national government from the bottoms up, i.e. each state did it, a majority of nine was sufficient to approve the constitution and permit the formation of a government. The Articles specifically instructed the ratification by each state was by holding a ratifying convention–not a referendum. A ratifying convention is an indirect representative institution in which delegates are chosen by special election was held and delegates, for example 30 in Delaware were sent to a convention to debate and vote. Each state legislature set the terms and conditions for eligibility to vote in accordance with state laws at the time, the nomination for delegates, and the important unit on which the election district was based, district, county, town etc. As we have discovered, malapportionment and restricted franchise were hallmarks of the Virginia franchise. This was by no means unique although Virginia was more extreme than many.

Delaware, the first to ratify, voted 30-0 in favor. Rhode Island used a referendum, which rejected the Constitution. New Hampshire became the ninth state on June 21, 1788–so the Early Republic came into existence at that point and elections for Congress and President were scheduled and held by each state. Virginia, New York and North Carolina had NOT ratified the Constitution before the government started. They were among the most populated. A majority of the American people had not in fact given consent to the formation of the Early Republic previous to its formation. Virginia and New York ratified in close ratifying conventions and were able to take their seats and participated in the elections. North Carolina did not until after Congress and President had been elected. Rhode Island, fearing a popular referendum would not allow it to join the new nation, held a ratifying convention in 1790 and then joined.

The technical question is whether a ratifying convention chosen by a special election is sufficient to satisfy the prerequisites of “approval by the people”. That is not my job to make your decision but an answer to whether the Constitution was in fact based on consent by the states versus the “American people” is because that question underlies the nature of the Early Republic–a national government co-sovereign with the states and created by the states, or a government of the “people” within those states–that is the Constitution is a agreement or “compact” between a majority of the American people–bypassing the states entirely. Today that question is a no-brainer. At least in theory it was a major reason we fought the Civil War, to save the Union. No Supreme Court today will ever declare the original Constitution invalid–it was approved precisely on the terms specified in the Articles legislation.

The problem with “people” , however, is two-fold: (1) just who is, and is not, included in “people”–the obvious groups like women and blacks, non-adults were excluded. So were non-property holders in many states, renters and sharecroppers, etc; and (2) the ideology of the American Revolution proclaimed it a popular revolution against great Britain, and in that vein the Declaration of Independence was an exercise in popular sovereignty asserted by the Second Continental Congress–whose delegates were chosen by state legislatures. When many states wrote their initial state constitutions, they justified their approval by state conventions, sometimes by popular referendum. Virginia was the ratifying Fifth Convention–no referendum was ever held in Virginia for its state constitution. In essence, the assertion that popular sovereignty underlie both the new state constitution and the Federal Constitution required some leap of faith–and those unsympathetic fo the 1789 Constitution were not willing to make that leap. The first rebellion of the Anti-Federalists was in 1788 before the Constitution was ever formally approved.

 Footnotes

[1] The clearest, shortest. most concise, and fair interpretation of the 1788 debate that I found was in Stanley Elkins and Eric McKitrick, the Age of Federalism (Oxford University Press, 199), pp. 12-3

[2] Drew R. McCoy ,the Elusive Republic (W. W. Norton & Company, 1980), p. 106

[3] Noah Webster, Sketches of American Policy, ed. Harry R. Warfel (New York, 1937), p. 29

[4] Drew R. McCoy, the Elusive Republic, quoting observations from the period, pp 114-6

[5] Drew R. McCoy, the Elusive Republic, p. 113

[6] Stanley Elkins and Eric McKitrick, the Age of Federalism, p. 195

[7] Stanley Elkins and Eric McKitrick, the Age of Federalism, p. 195