Capitalism and a New Social Order: The Republican Vision of the 1790s
Joyce Appleby, 1984

I read a lot of books in graduate school about American historians’ argument over what they called the “Market Transition”, when a primarily rural and non-commercial society in early America became enmeshed in capitalist markets. There are a variety of opinions about when, where, and even whether this happened. Joyce Appleby was a central participant in this debate. She began the series of (Phelps) lectures that became this book with an anecdote about an attempt in 1865 to create a Cambridge University lectureship in American studies. It was defeated, she said, because the dons feared the republicanism of undergraduates might spread among the general public, at a time when the British republicanism of the Reform League looked particularly unsettling to the ruling class. Richard Cobden remarked that no “Oxford of Cambridge undergraduate...could have pointed out Chicago on a map even though it was a city that indirectly fed a million Englishmen.” And Britain was content to keep it that way.

Appleby shared with Cobden a sense of the importance of economic facts that was probably lacking among educated Englishmen in 1865. She argued in these lectures that both the facts of economic change and the revolutionary changes in economic thinking pioneered by Adam Smith were more legitimately the property of Jeffersonian Republicans than of Hamiltonian Federalists. Despite a tradition that would cast Jefferson as an anti-capitalist agrarian, Appleby said the real division was between a party that looked forward (with Smith and Jefferson) to progress based on natural, rational self-interest, and a backward-looking “classical” republicanism that believed a “virtuous” (in the old sense of politically-disinterested) elite was needed to balance the power of the interested democratic majority. She didn’t mention Adams, although this description seems to fit him like a glove; nor did she seem that interested in the opinions of regular people beyond the big names. This classical republicanism, she implied, was based on a no-longer-valid zero-growth (and therefore zero-sum) economy. Suspect in Europe, this Hobbesian/Malthusian vision was completely invalid in the U.S., where the existence of the frontier “stood Ricardo’s iron law of rents and wages on its head.”

An interesting element of Appleby’s argument was that she was talking about intellectual history, not economic determinism. While she acknowledged the influence of material changes, she was really more interested in the “Ideas [that] joined a group of established elite reformers to a network of political interlopers,” resulting in the Jeffersonian revolution of 1800. Appleby didn’t completely sustain this point, I think; especially in the sense that she failed to identify the chicken and the egg. But it was her characterization of the Federalists as upholders of the mainstream tradition that was most interesting to me. The Federalists, she said, “never lost their posture of protecting known truths about civil society. They knew that it was their opponents who were treading unfamiliar paths and they appealed to history and common sense to prove them wild visionaries.” Their problem, of course, was that something was
really happening that changed the game and their opponents had a better grasp of it. But that may be more because they were conservatives than because they were elitists. A function of nostalgia rather than ideology.

“Classical theory,” Appleby said, “emphasized that civil society was fragile...that there were two orders of men -- the talented few and the ordinary many -- ...[and] a properly balanced constitution would balance the powers of these two groups.” Colonial America, she said, experienced “pervasive Anglicization.” Observing there was a “large bulge in the center of the social pyramid,” Appleby suggested that the economic security, “stability and well-being of the great majority of colonists permitted resistance to turn into rebellion and ...revolution.” A desperate, violent, starving mob, she implied, would have pushed the middle class toward the British side.

Appleby made an interesting observation about our use of words whose meanings have changed over time. Liberty, she explained, had three “intellectual contexts,” and the one we’re most familiar with today (“liberty as personal freedom”) was the one American colonists would have been
least focused on -- at least until 1776. Before the American Revolution] she said, “liberty more often referred to a corporate body’s right of self-determination.” This distinction seems to blur the difference between individual versus group rights on the one hand, and political versus economic concerns on the other. But maybe that’s part of the ongoing issue with these ideas: that we’re never that clear about how these various ideas about individual rights and group responsibilities ought to play together.

One of the things that distinguishes the “liberal conception” of liberty, Appleby said, is its ahistoric nature. Rather than looking for examples in classical cultures, Hobbes and Locke "reasoned from an imaginary account of man in the state of nature to an abstract definition of liberty.” But this system-building impulse (of the empirical enlightenment? the scientific revolution?) wasn’t universally shared. Most people stuck to the old ideas of corporate liberty, so that “Only when it became clear that their interpretation of the imperial crisis was not shared in the mother country did colonial rebels shift ground from the historic rights of English subjects to the abstract rights of all men.” But ultimately it was economic change, in the form of “freedom from the fear of dearth that enabled this change of attitude to become widespread.”

Appleby moved quickly on in the next chapter, to discuss the intellectual development symbolized by Adam Smith’s
Wealth of Nations. “The actual round of economic activities in early modern England was not at all suggestive of uniformities,” she admitted. But “Despite its evident diversity, the newly extended commercial system nonetheless suggested order to those who observed and analyzed it.” Did the urge to systematize and depersonalize “economic laws” really originate with Smith and Ricardo’s observations of British commerce, though? Or with a zeitgeist that influenced intellectuals across a wide range of disciplines to seek global, scientific (and ironically non-empirical, a-priori) regularity in the face of increasingly diverse and often confusing data?

This new economic system (I almost want to say ideology) had a couple of hurdles it needed to get over: social beliefs formed by observation and classical tradition. For example, “Self-interest could only be accounted socially benign,” Appleby said, “if it could be demonstrated that all this incessant striving after private ends did not lead to chaos,” but in fact to social optimization. Other standards of value and motivations for action had to be ignored or subordinated to those reflected by the only measurable quantity, money. “
Homo faber, man the doer, took precedence in these writings over man the believer, man the contemplator, even man the sinner.”

As I read this, I wondered if it wasn’t the explosive growth of the mercantile sector at this moment in history that allowed for this reductive sleight of hand by historians? If there wasn’t
so much to see in the world of commerce, would all the things left out of economic thinking have been more obvious? Similarly, in the early Republic, are we seeing an increase in agricultural productivity based on expansion into fertile western lands and reduced population growth, and attributing these changes to a new rural capitalism, just because we know what happens later?

Appleby mentioned Jefferson’s preference for wheat over tobacco in
Notes on the State of Virginia, as a “benign conception of an economy of food production [that] was to have far-reaching ideological implications.” I have a lot of trouble seeing Jefferson as someone with a clear vision of agricultural realities, but he was clearly the founder of a powerful agrarian, free labor ideology. But Jefferson’s agrarian vision (or at least the vision attributed to him) may hide more than it reveals. Albert Gallatin’s protest of the 1800 Bankruptcy Act may be more instructive. Appleby said Gallatin believed it favored merchants, when in fact “the same man [was] frequently a farmer and a merchant, and perhaps a manufacturer.” Appleby quoted Louis Hacker’s complaint that American historians writing after the period of the robber barons always had an “anticapitalist bias.” But Jefferson’s belief that wheat was a better crop than tobacco was based on the special case of early-cultivation bumper crops on an expanding frontier. And on the particular ways tobacco was cultivated in the south (particularly slavery). The point is, we’re not talking about anything remotely resembling universal economic laws. We’re always talking about special cases.

Somehow, though, we’ve developed the idea that economic theories, which all developed in particular historic moments, represent some type of higher platonic reality. An expanding economy clearly leads to optimistic,
laissez faire conclusions about opportunity, protection, and social responsibility that become the assumptions of the next round of theories. This seems so obvious that I’m a little embarrassed to be putting so much stress on it. But it doesn’t seem to be carried into the histories. We still say “the first capitalists were farmers and landlords,” as if we can recognize some universal definition of “capitalists” that applies equally to eighteenth-century farmers and twenty-first century investment bankers. Appleby said Jackson Turner Main examined the issues dividing legislators, and then “worked back to the constituencies...and discovered that American voters were either localists or cosmopolitans,” depending on where they lived. Main seemed at least to complicate the economic issues by addressing locations and ultimately the sources of people’s money. Maybe this type of approach allowed economic events to influence historical change without letting economic theory determine it.

Appleby touched briefly on class, mentioning that the British Attorney General warned Thomas Cooper to “Continue if you please to publish your reply to Mr. Burke in an octavo form, so as to confine it probably to the class of readers who may consider it cooly: so soon as it is published cheaply for dissemination among the populace, it will be my duty to prosecute.” British and American conservatives find themselves side by side in Appleby’s conclusion. Alexander Hamilton called “the belief that commerce might regulate itself a ‘wild speculative paradox,’ but Adam Smith’s invisible hand was warmly clasped by the Republicans.” Thomas Cooper’s 1800
Political Essays encapsulated the libertarian creed Appleby said Jeffersonians endorsed. “Prohibit nothing,” Cooper said, “but protect no speculation.” It’s ironic that the history of capitalism in America became mostly a story about businessmen and politicians preaching the first injunction while continually breaking the second.