THE ARGUMENT
In order first to win and then secure its independence from Britain, the early United States, under the leadership of gifted policymakers like Robert Morris and Alexander Hamilton, had to create a competent government with a dynamic capitalist economy. But no matter how efficient public and private institutions were, the growth and prosperity of the United States were constrained by the limits imposed on all preindustrial economies. The great fortunes in the early American republic, as in other premodern economies, were those of landowners like Stephen Van Rensselaer III and Robert Livingston or merchants like Stephen Girard and John Jacob Astor, who profited from long-distance trade in luxury items for the rich. Thomas Jefferson and other agrarian thinkers promoted the vision of a democratic republic that would limit the competition of parasitic landlords and rapacious merchants with family farmers for the small surplus produced by a premodern economy. In the context of an impoverished, largely static agrarian economy, Jefferson’s vision made sense. But neither Jefferson nor Adam Smith and the early British economists foresaw the imminent liberation of humanity from Malthusian limits by industrial technology.