A review of Reconstructing the Commercial Republic: Constitutional Design after Madison, by Stephen L. Elkin
The commercial republic advocated by David Hume, Adam Smith, and others in the 18th century was a radically new idea. To these philosophic advocates, and to the American Founders who put the idea into practice, the commercial republic was a remedy for the factional strife and warring tendencies endemic to ancient and theological regimes. It was also a humane alternative to the strenuous demands such earlier regimes placed on their citizens. The theological-political regime had been built upon comprehensive sets of laws that regulated religious belief, limited economic activity, and sought to use civic education to mold community opinion, suppress faction, and develop a common character among the citizenry. The commercial republic, its apologists argued, would be based upon "men as they are," passion-ridden and concerned principally with self-preservation and material comfort.
The adoption of a commercial republic, the now familiar story goes, entailed a series of tradeoffs that amounted to wholesale social and political transformation. Piety and philosophy were subordinated to the bustling, individualistic, acquisitive life. Government was concerned no longer with the cultivation of the few, but with the rights of the many. The classical view had suggested that each person's body was under the control of the polis for purposes of labor, procreation, and battle; now individuals were thought to have a property in their own person, giving them claims to the products of their labor and against state interference. Concern for austerity, self-sacrifice, and magnanimity were replaced by what Tocqueville characterized as the "decent materialism" of the ordinary man. The citizen solider was replaced by the aspiring merchant, just price by market value, and the aristocratic pride and pretensions of the great-souled man gave way to the "bourgeois virtues" of the self-made man.
In his ambitious book, Reconstructing the Commercial Republic, Stephen Elkin reconsiders our 250-year-old experiment and provides a blueprint for reconstructing and redirecting it. Unlike Hume and Smith, Elkin is not concerned with providing a defense of the commercial republic, which he thinks merits our allegiance because the world offers few successful alternatives and because it fits the cultural dispositions and deepest aspirations of Americans. It is, in short, who we are and who we aspire to be. Nor is he as interested as Tocqueville was in understanding the character of commercial, democratic regimes. His analysis is more diagnosis and remedy. In a nutshell, Elkin wants to reconstruct the American commercial republic so that the economic prosperity it so successfully generates is more equally distributed and a more meaningful, participatory democracy is created.
He begins with James Madison—the most profound American student of republican government and the commercial republic whose goal, as Elkin sees it, was to found a self-limiting popular government. Here the people are sovereign, but they will call for limitations on their own power. The Madisonian political constitution was also designed to prevent abuses by factions, protect rights, guarantee fidelity to the rule of law, and promote deliberation in law making. (When Elkin uses the word "constitution" he is referring not simply to a written fundamental law, but to the political and economic order as a whole, including the social mores and particular conceptions of justice that it fosters.) Madison's vision of the commercial republic, according to Elkin, was predicated on the assumption that a propertied interest would necessarily hold the reins of political power, but also that these commercial statesmen could be induced, by separation of powers and the deliberative processes of governmental institutions, to think of their interests in a capacious, long-term fashion. Finally, the Madisonian political constitution was designed to facilitate the formation of civic majorities that would monitor and check the actions of elected officials and provide additional energy to secure the public interest.
But the Madisonian political constitution contained important flaws, Elkin argues, and has failed in substantial ways. Despite its relatively good record of protecting the rights of the majority, it has failed to protect the interests of minorities, especially blacks, women, and those on the political Left. It has also failed to facilitate the formation of civic majorities, and has not adequately insured that the propertied interests it empowered would, in fact, broaden their interests.
Perhaps even more important than its intrinsic flaws, however, the Madisonian constitutional design has been forced to operate in the context of a political economy dramatically different from the one that Madison knew. First, claims Elkin, the means of productive property is no longer owned mostly by individuals but rather by corporations, which are legally required to pursue profitability in the interest of their shareholders. The landed proprietors who Madison hoped would have an enlarged vision of their commercial interests have thus been replaced by a narrower group of corporate capitalists. Second, the national government has been made responsible for promoting high levels of economic growth. Third, an administrative state has developed, featuring a bureaucracy that combines legislative, judicial, and executive powers and makes most important economic decisions within "iron triangles" out of public view. Taken together, these changes in the American political economy have given the propertied a "worrisome set of political advantages."
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Elkin's analysis of the shortcomings of Madisonian theory launches the construction of his own theory of a political constitution—a project that occupies the second half of the book. It is essential to his project that Elkin establish a substantive but broad conception of the public interest to serve as a standard for guiding and limiting popular rule. Madison's most pronounced failure as a theorist of the commercial republic, according to the author, was his unwillingness to give an account of the public interest so that lawmakers could understand its demands. In contrast, Elkin could not be more explicit:
To serve the public interest means to secure political institutions that control faction, that are deliberative in form, that secure rights, and that aggregate interests in a politically equal fashion. It further means to secure private-property-based market institutions that create widely available and at least moderately remunerative work, and whose political counterparts give significant discretion and inducements to controllers of productive assets. Serving the public interest also means securing institutions that facilitate creating and maintaining a vibrant civil society in which nongovernmental forms of cooperation flourish.
In Elkin's hands, the public interest thus becomes a mixture of conservative and liberal policies and purposes. He accepts the argument of contemporary conservatives that businessmen must be given inducements to invest and wide latitude of freedom to move their capital. Contemporary conservatives will also find heartening Elkin's contention that the Supreme Court should not be given a privileged position in defining the limits of public and private power. Unlike many liberal democratic theorists, he is not much concerned with reform of the United States Constitution; nor is he sympathetic to the European model of social democracy. Multi-party proportional representation systems are inconsistent with the public interest, he contends, because they create ideological parties and because highly disciplined parties impede deliberation. He even praises the Electoral College as a means of spreading votes across all regions. Finally, he suggests that conservatives who emphasize the importance of the family as a means of establishing a republican citizenry "are on to something" and he favors school vouchers as long as they serve as a means of creating competition and improving school performance.
Nevertheless, as it unfolds, Elkin's understanding of the public interest increasingly takes the form of a progressive agenda based on a host of reforms in "the areas of work, property, mores and local political life." These reforms are designed to broaden the interests of the propertied, uplift local political life, make the middle class more secure and comfortable, increase the visibility of the political process, provide willing workers with meaningful and financially rewarding work, and promote political and economic equality. To free local governments from the stranglehold of business, for example, he advocates a national full employment policy; giving local governments the power to secure repayment from absconding businesses that have benefited from local public investment; and empowering local governments to exercise eminent domain to acquire departing companies at market value. He also supports "inheritance taxes" and a progressive income tax; but he is even more in favor of wealth building strategies such as basic income grants or "life grants" that might, for instance, give each citizen $1,000 at birth and $500 annually for the next five years. Policies such as these, according to Elkin, diminish inequality from the start rather than after the fact of wealth accumulation, do not demand the use of the coercive power of the state, and do not leave intact the structural arrangements that led to wealth accumulation in the first place.
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Elkin clearly admires Madison as the great, if ultimately inadequate, theorist of the commercial republic. But beyond serving as an inspiration for thinking about how to create a self-limiting popular government, it is not at all clear why Madison is necessary to Elkin's project or how Madison provides authority for his remedies. Furthermore, there is much to admire in Elkin's characterization of the Madisonian political constitution, but he knows little about the spectrum of political economy in the early republic or Madison's conception of political economy in particular. Elkin treats Madison and Hamilton together as commercial republicans who unambiguously embraced industrial development and believed that a propertied class should be attached to the national government. Actually, Madison struggled throughout the 1780s and 1790s with how best to secure a "republican distribution of citizens." In essays that he wrote in the 1790s for the National Gazette and in speeches in the First Congress, he contended that America's natural advantages were in agriculture and displayed a thoroughly Jeffersonian commitment to an agrarian citizenry. During this time, he railed against the speculative wealth produced by Hamilton's fiscal plan and the regional and class bias of Hamilton's policies.
To be sure, Madison was a steadfast advocate of protecting property, promoting commerce, and electing elite statesmen. But generally what he had in mind was commerce with European nations, who would be sent America's surplus agricultural products in exchange for manufactured goods, a trade that would allow Americans to remain virtuous farmers for generations to come. Most important, when Elkin groups Madison with Hamilton—a common failing of political theorists who know Madison almost exclusively from The Federalist—he fails to see that Madison was an opponent of the privileges for the economic elite that Elkin, like Hamilton, believes necessary for the realization of the commercial republic. Elkin thus fails to acknowledge that if the American Founders all favored commercial republicanism, they nevertheless did so with numerous variations and degrees of enthusiasm and different evaluations of the costs and benefits of economic development.
Besides, few of Elkin's remedies were ever envisioned by Madison, and some of them (such as devolving decision-making upon local governments) were vehemently opposed by him. Thus only in a very attenuated sense could he be said to be carrying on Madison's project.
What, then, of his own project? Elkin's uninhibited borrowing from the Left and the Right does credit to his open-mindedness, but it raises the question whether there is anything like a coherent program here. Certainly, there is tension between granting privileges to those with capital and wresting hegemony from them. Can any regime bring together the equality and strong democracy he advocates with extensive material prosperity? Aren't inequality and political apathy somehow endemic to the commercial republic? It may not be possible to realize Elkin's new and improved commercial republic without fundamentally changing the character of the American regime and the culture on which it rests. The central value of his study is that it challenges us to think seriously about the possibility.