There were several major economic arguments made by the opposing parties in the debate over the Constitution. Federalists argued that the economy during the Confederation years was in disastrous condition and that the cause was the ineffective government under the Articles. The Constitution, Federalist said, would permit a unified trade policy that would command respect from and permit retaliation against the British. This would benefit merchants, farmers, and laborers. The state governments were engaged in economic policies—such as the emission of legal tender paper and stay laws that prevented creditors from collecting debts owed them—that protected debtors and violated the rights of property. While the Confederation was powerless to stop these damaging policies, the Constitution by specific prohibitions on the states, would establish stable economic conditions that would protect and attract capital, thereby encouraging the growth of the American economy and restoring prosperity. The poor were hardest hit by the policies of the states, and it was the poor who would benefit the most from a rigorous government and the prosperity it would bring. Finally, Federalists argued that the new government, because of its complex structural checks and balances, would allow for the representation of all economic interests, while ensuring that none would dominate. Economic factions, which had been ruinous to the political systems of other republics, would under the Constitution be controlled and constructive.
Antifederalists rejected these points. They denied that state economic policies were bad or that economic conditions were disastrous. They pointed out that the states were paying off state and national debts, the prevalent condition of the country was wide spread ownership of land, that property was secure, that the country was at peace, and recovery from wartime destruction was steadily proceeding. The Confederation government was actually engaged in selling its huge national domain in the West and its credit was sufficiently sound to obtain a large loan from private Dutch bankers. Although Antifederalists favored retaliation against the British, they argued that the states were doing this effectively on their own. To the extent that federal power had to be enhanced to allow coordinated trade policy, they favored a grant of specific power in the federal government to regulate trade and enact tariffs. However, they argued that the vague language of the Constitution to regulate commerce and impose taxes was unlimited and consequently dangerous. Antifederalists were doubtful that the myriad of interests in the country would be balanced and controlled by the government under the Constitution. They were persuaded that the new government would be dominated by a narrow aristocracy of the rich who would seek to control the economic affairs so as to benefit themselves. A small House of Representatives of sixty-five members and a tiny Senate could never represent the many classes, occupations, and professions in America. Consequently, Antifederalists feared Congress would be controlled by the wealthy and the lawyers to the exclusion of the broader population.
In short, Federalists and Antifederalists had different views of the state of the economy, of the appropriateness of state policies to deal with economic conditions, of the necessity for changing the Articles of Confederation to improve business and trade conditions, and of the ability of the Constitution to control economic factions or to allow the representation of the diverse economic interests of the people.
An Outsider’s View American Society
- Federal Farmer, Letters to the Republican, 8 November 1787
- Centinel III, Philadelphia Independent Gazetteer, 8 November 1787
- A Plebian: An Address to the People of the State of New York, 17 April 1788
- Federal Farmer: An Additional Number of Letters to the Republican, 2 May 1788
- Melancton Smith Speech: New York Ratifying Convention, 21 June 1788
- James Madison to Thomas Jefferson, 24 October 1787
- A Landholder I, Connecticut Courant, 5 November 1787 (pdf)
- A Landholder II, Connecticut Courant, 12 November 1787 (pdf)
- Resolutions of the Tradesmen of Boston, Massachusetts Gazette, 8 January 1788
- Benjamin Rush to Jeremy Belknap, 28 February 1788
- Francis Hopkinson to Thomas Jefferson, 6 April 1788
- David Ramsay Oration, Charleston Columbia Herald, 5 June 1788
- Edmund Pendleton Speech: Virginia Ratifying Convention, 12 June 1788
- Alexander Hamilton Speech: New York Ratifying Convention, 21 June 1788