Vol. 14 No. 3 (March 2004)
TO FORM A MORE PERFECT UNION: A NEW ECONOMIC INTERPRETATION OF THE UNITED STATES CONSTITUTION, by Robert A. McGuire. Oxford: Oxford University Press, 2003. Hardback. 416 pp. $24.95. £25.00. ISBN: 0195139704.
Reviewed by Irwin L. Morris, Department of Government & Politics, University of Maryland. Email: firstname.lastname@example.org .
In 1913, Charles Beard published AN ECONOMIC INTERPRETATION OF THE CONSTITUTION OF THE UNITED STATES OF AMERICA, the first substantial development of the thesis that the content of the Constitution was primarily attributable to the personal economic interests of the Founding fathers. It was, to say the least, a controversial argument. In an especially telling quote, "Nicholas Murray Butler (1939), the president of Columbia University, where Beard held a professorship in 1913 declared: 'It is a travesty to dignify so unscholarly an adventure by the title of an economic interpretation of history'" (p.17). Banned from a school library in Seattle, Beard's book drew the contempt of none other than former President William Howard Taft. The popular response was, rather obviously, quite negative. However, among his academic contemporaries, Beard's "Marxist" or "socialist" analysis (as it was referred to by some critics) received considerable support, and, according to McGuire, "Beard's thesis eventually emerged as the standard historical interpretation and remained so until the late 1950s" (p.17). By the late-1950s, however, Beard's thesis had come under renewed attack, and by "the beginning of the cold war era . . . the scholarly onslaught on Beard's interpretation had begun" (p.17).
In his new volume on the economic underpinnings of the Founding, Robert A. McGuire resurrects-to some extent-the Beard thesis. Though the details of McGuire's "new" economic interpretation of the Constitution vary a good deal from the details of Beard's original economic interpretation, the thrust of both is the same: the personal economic interests of the founders (and those of their constituents) played a determinative role in the development of the Constitution. Using the tools of modern economic theory (rational choice theory) and econometrics, McGuire develops a perspective that ties personal and constituent economic interests to support for/opposition to various aspects of the Constitution and support for/opposition to the document as a whole. He then examines-in a relatively sophisticated manner-the extent to which the implications of his theory are borne out in the data from the Constitutional Convention and the various state ratification conventions. The results are largely supportive of the new economic theory of the Constitution.
To set the stage for his new economic theory of the Constitution, McGuire provides an overview of the twentieth century historiography of the Constitution, focusing on the post-1950 era in which Beard's analysis came under such consistent attack. The general thrust of this literature review is that the "prevailing interpretation" (p.15) of the Constitution is not economically-oriented and is, in fact, antithetical to an economic interpretation. Apparently, the conventional wisdom associated with the ratification of the Constitution is similar; economics plays an insignificant role. In short, "[m]ost general discussions of the issue today argue that the Constitution came about because of a consensus to improve the general well-being of the country, not as a result of a conflict over economic interests" (p.30). Although opposition to the "prevailing interpretation" is not monolithic, McGuire considers the proponents of an economic interpretation of the Constitution a very small minority.
The overall structure of McGuire's empirical analysis is straightforward. With data on both the personal and constituent characteristics of nearly all of those attending the Constitutional Convention, McGuire examines the relationship between these characteristics and substantive aspects of the Constitution (and the constitutional debates) from a number of perspectives. Basing his new economic theory of the Constitution on a principal-agent model of representative behavior, McGuire examines the extent to which the founders' votes were a function of their principals' (constituents') economic circumstances and ideological orientations, and the extent to which their votes were a function of their own economic circumstances and ideological orientations. The structure of the multivariate analysis is such that McGuire explicitly estimates the partial impact of these economic and ideological factors on voting decisions. This is an important departure from a literature based largely on an examination of total effects. So, for example, a failure to understand that the founders often faced "conflicting interests" could lead to spurious inferences. As McGuire argues:
Adoption of a particular issue at Philadelphia, or of ratification, could have had a partial effect on a founder with a specific interest such that the founder would have opposed that issue, or ratification, if he took into account only that partial effect. Yet the founder might have actually voted for the issue, or ratification, because the total of the partial effects of all his other interests outweighed the negative partial effect of the one specific interest (p.34).
McGuire's analysis of convention votes includes an examination of the personal and constituent determinants of individual votes on more than a dozen significant constitutional clauses-ranging from the prohibition of trade embargoes to the role of the national government in the arming and organization of state militias-and an evaluation of the determinants of representatives' support for one of the foundations of the broader design of the Constitution-nationalism.
Overall, McGuire finds at least some support for the contention that each category of variables-personal economics and ideology, and constituent economics and ideology-played some role in determining the voting patterns of convention delegates. The impact of economic interests (both personal and constituent) was sizable on a number of important issues. For example, slaveowners strongly opposed national export tariffs; merchants opposed the two-thirds rule for enacting laws regulating trade; and delegates with large private securities holdings opposed the ability of states to issue paper money. State population and slave holdings were significant constituency variables for a number of specific clauses.
On the broader issue of nationalism, McGuire also finds a significant role for personal and constituent economic interests and ideology, a blow to much of the literature on constitutional economics. According to McGuire, positive theories of constitutional economics presume that constitutional decisions are made behind a "veil of uncertainty" (p.111), thus making it impossible for delegates to know how their decisions will affect either their own or their constituents' circumstances, so "partisan interests do not matter for constitutional choice" (p.112). The results presented here suggest just the opposite: "Both partisan personal interests and partisan constituent interests influenced voting on nationalism at the Philadelphia convention" (p.127).
McGuire finds similar results, and thus draws similar conclusions, in his analysis of the votes in the state ratifying conventions. The evidence from the pooled analysis of the votes in the state conventions suggests that support for the constitution was enhanced by personal characteristics, such as lack of debt, ownership of public and/or private securities, and proximity of the delegate's home to navigable water. Farmers and merchants were more likely to support ratification; slaveowners were more likely to oppose it. There is also evidence that state population and, somewhat surprisingly state slave population are positively associated with support for ratification. These constituency results are not, however, robust across regions.
The state-by-state analysis-for the seven states in which the vote was not unanimous and for which there are sufficient data-largely affirms the findings generated by the pooled analysis. This is especially true for the "results for commercial activities and [personal] slaveholdings" (p.205). One slight but important difference is that the individual state analyses suggest that state-level slave holdings were negatively associated with support for ratification (in contrast to the pooled result). McGuire makes a compelling case that the ratification results contrast with much of the historiography of the ratification process, and he provides details of these contrasts for several of the state conventions that have received considerable attention. For example, his ratification analysis contradicts the widely held position that slaveowners were "more likely to have voted for ratification" or "that no pattern in the vote related to slaveholdings existed" (p.197). Significantly, McGuire concludes that "had the men involved in its ratification had substantially different economic, financial, or personal interests, the Constitution certainly would not have been ratified, at least not as it was written" (p.212).
McGuire makes an admittedly strong case for his new economic theory of the Constitution and, indirectly, Beard's treatment of the Founding. In the context of his literature review, his theory is a novel and important departure from the historiography of the Founding. McGuire could make a better case for the significance and novelty of his perspective if his description of the historiography of the Founding were not dominated by works that are now decades old. There is clearly greater support for some sort of economically-oriented account of the Founding in more recent work, but the treatment of this newer literature is relatively superficial. Along the same lines, much of the volume is based on analyses which are extensions of McGuire's own published work-listed in the Acknowledgements-some of which is a couple of decades old. This new economic theory of the Constitution has clearly been around for some time. Most readers would find a fuller treatment of the most recent historiography, including responses to the new economic theory, useful and informative.
The empirical analysis presented in the volume is quite thorough, and McGuire's use of individual-level and state historical data is ingenious. Nevertheless, at times it can be redundant. For example, Chapter 4, "Another Look at the Choice of Specific Clauses," adds little of substance to the analysis presented in Chapter 3, "The Choice of Specific Clauses in the Constitution." By estimating the effects of personal interests and constituency interests separately (instead of in a single model as in Chapter 3), McGuire is able to incorporate more personal interest variables (e.g. number of children and Scottish/Irish ancestry) and constituency interest variables (e.g. distance to Philadelphia and Scottish/Irish ancestry in state). Unfortunately, the separate models are-given the previous chapter's findings-improperly specified (statistically and substantively significant variables excluded) and, even if they were properly specified, the "new" results add little to the argument. In a book in which the appendices take up nearly 30% of the space, this analysis could (should) have been dropped.
Finally, there are two nontrivial editorial points: one substantive, one statistical. One the substantive issue, McGuire uses the term "partisan interests" somewhat cavalierly. For example, he attributes the following perspective to the proponents of constitutional economics: ". . . a self-interested actor behaves differently during the constitutional stage of collective decision making than during any other stage-partisan interests do not influence the basic design of a constitution" (p.110). The context of this passage suggests that he is referring to personal interests and/or constituency interests with the term "partisan interests." But McGuire never argues that either the Federalists or the Anti-Federalists had monolithic personal or constituency interests, so it is difficult to see how partisan interests can be used as a synonym for personal and constituency interests. On the statistical point, the notation of significance levels in the tables is inconsistent. Sometimes significance levels are indicated, sometimes not. And the symbols used to indicate specific significance levels change from table to table. It is a relatively small issue, but it is irritating nonetheless.
As a reader who is not steeped in the historiography of the Founding, I found this volume quite interesting and informative. It strikes me as odd that anyone would argue that the delegates' (both those at the Constitutional convention and the ratifying conventions) personal economic circumstances and the economic circumstances of their constituents played no role in the deliberations, the character of the final document, or its ratification. But, it appears that is just what a number of prominent scholars did and do think. Given that, this volume is a welcome addition to the literature on the Founding.
Beard, Charles. 1913. AN ECONOMIC INTERPRETATION OF THE CONSTITUTION OF THE UNITED STATES OF AMERICA. New York: Macmillan.
Copyright 2004 by the author, Irwin L. Morris.
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