I contend that a trajectory wherein capitalism came to eclipse or capture democratic governance occurred in the nineteenth century in the United States. President Andrew Jackson’s actions in the early 1830s can be viewed as a benchmark wherein government officials were still willing to relegate the interests of capitalists for the good of the whole.
According to Brands, “Andrew Jackson embodied the democratic ethos, by both his humble origins and his reverence for the people as the wellspring of political legitimacy. Jackson waged political war on the pet projects of the big capitalists of his day, smashing the Bank of the United States, vetoing federal funding on roads and canals, and beating down tariff rates.” (1) Actually, Jackson’s object was not to reduce the capitalists of his day; rather, he was attempting to protect the balance between the general and state governments in the federal system.
For example, President Jackson vetoed federal funding for the Mayville road because it was confined to the territory of Missouri. That is, the road did not cross state lines, so it did not involve interstate commerce directly. The state itself had jurisdiction. Had Jackson not vetoed the funding, then interstate commerce “regulation” as spending would have opened the floodgates to Congressional power. Jackson was also rejecting the argument that spending for the general welfare goes beyond the enumerated power domains. In refusing to fund the public works project, Jackson was not acting in the interest of the potential private construction bidders. Hence as a byproduct the president was standing up to capitalists in his effort to contain federal power from encroaching on the state governments.
Second, Jackson feared that having a bank of its own would give the general government in Washington too much power relative to the state governments. For example, the Second Bank of the United States could conceivably print an unlimited number of bank notes to fund its government’s spending “for the general welfare”—eviscerating the enumerated powers in the process. Jackson refused to fund the bank before his re-election. Thus he risked having the financial sector turn against him in an election season. The long term viability of the American federal system was worth more to him than his own continuance in office.
Notably, Jackson was willing to cross Wall Street (something notably absent in President Obama’s financial “reform” law) for the good of the republic’s governance system. Put another way, the president’s protection of the system of democratic governance wherein governments check and balance governments in federalism trumped the particular financial interests of capitalists. By the time of Lincoln’s tight re-election race in 1864, capitalists would find a president willing to use (and defraud) the government to benefit them financially. The balance of power between capitalism and democracy had already shifted.
1. Henry W. Brands, American Colossus: American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), p. 5
