The US Constitution: ‘We, the Capitalists’

Some years ago, I had reason to visit the offices of Moore Capital, the major US macro hedge fund, in Mayfair, London. In pride of place on a wall in the foyer was a copy of the US Constitution, said to be one of the ‘originals’. A valuable historical document, no doubt, though it was only much later that I looked a little closer into its actual history. This was when chancing across an old text in a bookshop with the intriguing title An Economic Interpretation of the Constitution of the United States, by Charles A Beard. First published by Macmillan in 1913, this was a 1961 edition, and also a snip at just £2.

For all the claims of democracy that usually resound when the US Constitution is discussed, little attention is paid to the economic interests that drew it up. Beard did focus on the economics, to much controversy when his book was first published. At that time, there were heated debates over the split in the Republican Party and conflict over the popular election of US Senators, worker compensation and other social legislation. Beard freely admits that his book is a ‘long and arid survey’ (and, mostly, it is), and he draws his conclusions after marshalling a huge amount of evidence from the period leading up to the adoption of the Constitution on 17 September 1787.

This is a summary of what he found (pages 324-325 of the book):

“The movement for the Constitution of the United States was originated and carried through by four groups of personalty [ie property] interests … money, public securities, manufactures, and trade and shipping.

“The first firm steps toward the formation of the Constitution were taken by a small and active group of men immediately interested through their personal possessions in the outcome of their labors.

“No popular vote was taken directly or indirectly on the proposition to call the Convention which drafted the Constitution.

“A large propertyless mass was, under the prevailing suffrage qualifications, excluded at the outset from participation (through representatives) in the work of the framing of the Constitution.

The members of the Philadelphia Convention which drafted the Constitution were, with a few exceptions, immediately, directly, and personally interested in, and derived economic advantages from, the establishment of the new system.

“The Constitution was essentially an economic document based upon the concept that the fundamental private rights of property are anterior to government and morally beyond the reach of popular majorities. …

“The Constitution was ratified by a vote of probably not more than one-sixth of the adult males.

“The leaders who supported the Constitution in the ratifying conventions represented the same economic groups as the members of the Philadelphia Convention; and in a large number of instances they were also directly and personally interested in the outcome of their efforts.

“In the ratification, it became manifest that the line of cleavage for and against the Constitution was between substantial personalty interests on the one hand and the small farming and debtor interests on the other.

“The Constitution was not created by ‘the whole people’ as the jurists have said … it was the work of a consolidated group whose interests knew no state boundaries and were truly national in their scope.”

So that was why Moore Capital had the document on the wall.