Free Market in a Small Republic—Economic Doctrines of Jeffersonians and Jacksonians

Abstract

In this chapter, Jeffersonian and Jacksonian traditions in economic theory were reviewed. We found the basic continuity with the essential libertarian motiffs of the revolutionary thought (free trade, low taxes) but with an increasing level of theoretical sophistication: drawing inspiration from Adam Smith and French liberals, Jefferson, John Taylor and their followers, as well as Jacksonian economists like Leggett, Ragouet, or Gouge forged a powerful theoretical models explaining monetary and banking theory, free trade, nexus between the government and the economy, in a libertarian manner, anticipating some of the motives and arguments of the free market economic thought of the twentieth century. Also, we find further evidence of a deep affinity between political decentralization and economic liberty. These findings cast a strong doubt on the conventional treatments of Jeffersonian and Jacksonian economics as being variously “agrarian” or egalitarian or proto-socialist. It is shown that this is incorrect and that the main reason for these misguided interpretations is a conceptual confusion about what capitalism means—historians very often treat mercantilist and protectionist policies as synonymous with “commercial liberalism” because it is enacted for the benefit of some business interests, and free market thought as agrarian.