Created Equal? Founding Era Tensions on Economic Fairness

Apr 11, 2011William Hogeland

money-justice-scalesIn 1776, rowdy Democrats fought for equality. But their notions didn't suit early elites.
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"All men are created equal," the Continental Congress famously announced in the document that came to be known as the Declaration of Independence. These are powerful words -- and reflecting on America's founding struggles over money and finance can give the familiar phrase new resonance. For even as Thomas Jefferson was drafting the Declaration in a small, hot room in Philadelphia in the summer of 1776, the democratic popular finance movement was blooming in America. Throughout the country, ordinary people placed all hopes on America declaring independence from England. Equality was indeed their goal. And by this, they meant economic fairness: A newly level playing field where they could compete for prosperity.

Near the room where Jefferson wrote, the most successful of those democratic movements was coming to fruition in Philadelphia's Carpenter's Hall. To the artisans, laborers, mechanics, and militia privates gathered there, declaring independence from England offered an amazing chance for creating a new kind of government, fostering fairness for the less propertied, even the unpropertied; obstructing traditional high-finance privilege; and giving the ordinary people access to representation and economic opportunity. Right down the street from the Pennsylvania State House where the Congress met, supporters of this democratic movement were seizing the moment of crisis with England to bring about an economic revolution in America. And their 1776 Pennsylvania constitution made economic equality into law for the first meaningful time anywhere.

The Constitutional Convention: A Counterrevolution?

By the late 1780s, the economic advances of ordinary Americans were starting to look very successful. So successful, in fact, that in 1787, gentlemen from around the country gathered again in the Pennsylvania State House at what became the U.S. constitutional convention. Their primary goal? To push those advances back. Edmund Randolph of Virginia, who would soon serve as U.S. Attorney General and then as Secretary of State, kicked off the 1787 proceedings in the same room at the State House where the Congress had declared independence. He charged the convention with repairing America's "insufficient checks against the democracy."

By "the democracy," delegates like Randolph meant the popular finance movement that events of 1776 had unleashed. In the 1780s, for example, working people serving in the Pennsylvania assembly had actually gone so far as to shut down a central banking scheme operated for the benefit of America's fat cat lenders. That kind of democracy sent shock waves throughout elite America.

The elite gentlemen who gathered in 1787 agreed on several points. They believed that a national government should have power to take all significant finance and monetary policy away from the states, which they considered wimpily susceptible to democratic finance pressures -- and especially from those like Pennsylvania, which was actually in the hands of "the democracy." They thought that the national government ought to be able to enforce taxes earmarked for the big public investors and put down debtor insurrections with military force. Southern planters and northern bankers, state sovereignty libertarians and nationalist authoritarians, the men of the convention put aside their differences and formed a nation that would end the democratic paper money agitation, small-scale government lending, foreclosure relief, and debtor insurrection that weakened the investing class's stability and prevented efficient consolidation and deployment of the country's wealth.

Their differences lay mainly in how to structure and balance that national government. Those differences were of course deep, and they would go on fighting -- from the Kentucky and Virginia Resolutions to the Civil War to the New Deal to the Civil Rights Movement and beyond -- over what the U.S. Constitution says about the proper role of the federal government.

At the 1787 convention, however, they had a common enemy: economic equality. And they made no bones about their effort to suppress democratic finance.

Given those famous, forthright 1776 words about human equality, it's been easy for some readers and writers of history -- especially progressive ones -- to read the U.S. constitutional convention as a kind of counterrevolution. But despite the Declaration's famous phrase about equality, and despite the elites' blatant push back in 1787 against democratic finance, the 1776 congressmen really never intended to bring about a social, political, or economic revolution within American society. The State House, where the Congress declared independence, was geographically near -- but philosophically far -- from Carpenter's Hall, where popular finance reigned.

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Fuzzy notions that the independence Congress sought included social equality, or that the Constitution contradicts the Declaration, distract us from the real significance of surprising relationships -- strikingly salient for our political and economic struggles today -- between the genteel men of the State House and the rowdy democrats of Carpenter's Hall in the great year of 1776.

Jefferson Didn't Mean "Economically Equal"

To see how men of the Continental Congress differed from men of Carpenter's Hall in thinking about equality, it's important to remember that Jefferson drew the remark "all men are created equal" from 17th-century high-Whig philosophy. In using the expression, Jefferson wasn't suggesting government has a responsibility to foster equality. "Created equal" describes men in a natural state, before governments are instituted in order to, as the Declaration says, secure the unalienable rights with which all men are endowed by their Creator. The Congress was appealing to ideas widely accepted among gentlemen about representative rights, which the 1776 congressmen -- just like the 1787 convention delegates -- would inevitably have believed are held by property owners, not by poor, laboring, and other ordinary people. The last thing the Congress would have announced to the world in the Declaration of Independence is a smashing of the connection between property and rights. Indeed, the Declaration complained about the King precisely for violating property rights.

In that sense, the concerns of the men of the 1789 convention were analogous to those of the men of the 1776 Congress. They feared both what they saw as tyranny by the decadent king and what they saw as tyranny by the unpropertied mob. There was no 1787 counterrevolution in American society because, as far as the 1776 Congress was concerned, there had been no revolution in American society.

Genteel Congressmen and Rowdy Democrats: the Strangest Bedfellows of 1776

It's nevertheless true that at the very moment when Jefferson was drafting a socially conservative Declaration, vigorously democratic and deeply American ideas about equality in money, finance, and rights were coming to life right down the block. A seething, conflicted, secret, and highly creative relationship prevailed in 1776 between some of the gentlemen in the Congress and some of the democrats on the Philadelphia street. Long buried by history, the intensity of that relationship may be glimpsed in the antipathy of Thomas Paine and John Adams (Adams called Paine's "Common Sense" a "crapulous mass"). Antipathy finally came down to a shouting match between the two at Adams' rented Philadelphia rooms, in the spring of 1776, over what Paine saw as Adams' snobbish elitism and what Adams saw as Paine's egalitarian ignorance.

Yet even as they shouted, the men shared a goal: American independence. In fact, they were striving tirelessly together, Paine from the street and Adams in the Congress, to bring independence about by any means necessary. Coordinated in secret by John Adams' second cousin Samuel Adams, the two enemies worked behind the scenes to overturn the elected government of Pennsylvania, which favored reconciling with England and held sway over the middle colony bloc. They schemed to replace it with a new Pennsylvania government favoring independence. The new Pennsylvania government would tip the balance in the Congress, bringing about a resolution for independence on July 2. That government would also break the connection between property and rights and pass laws restraining wealth.

So in Philadelphia in 1776, economic elites and economic democrats worked together, albeit in secret and albeit with animosity, on a great task. The compromises were extreme and painful. To achieve American independence, Adams was willing to turn Pennsylvania over to the economic democracy he scorned as mob rule. And Paine, working for an economic revolution in Pennsylvania (and one day, he hoped, in the whole world), collaborated with the very men whose privilege he hoped to disable. Without that strange bedfellow alliance between elite privilege and democratic uprising, America would not have come into independent existence in July of 1776.

Understanding issues confronting both ordinary and elite Americans in founding era finance, and assessing their continuing impact on our lives today, means moving away from the simplistic "Declaration vs. Constitution" binary, which obscures more revealing founding alliances and arguments over the role of American government in ensuring economic fairness. What do we -- not Jefferson -- mean by "equality"? Pulling our real, and really fraught, founding alliances and arguments out of the shadows, and coming to terms with their hopes, conflicts, and contradictions, might help us start to answer that question.

William Hogeland is the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History. He has spoken on unexpected connections between history and politics at the National Archives, the Kansas City Public Library, and various corporate and organization events. He blogs at http://www.williamhogeland.com.

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