The Founding Fathers Economic Policies

America, in the late 1700s, boasted of a highly successful agricultural economy. The Founders of the United States believed that the American economy should be protected at all costs. Towards this end, they structured the national government such that it would have political functions that could protect and promote a prosperous economy. The American economy was marked by the high wages it paid and the abundance of cheap land that it had to offer. The Founders had policies regarding immigration and tariffs that benefited the economy. 

The financial health of early America was ideal because circumstances allowed for a strong economy with wealth equality. At the onset, there was a shortage of labor which led to a higher demand for it. America, at its founding, was a sparsely populated country, creating a market system where labor was harder to find while affordable land was in abundance to purchase. Secondly, in the early days of the American republic, there were vast expanses of unused, unclaimed land, along with an untold amount of natural resources. This phenomenon of land being affordable, and in lower demand than that of labor, greatly benefited the inhabitants of America. Since most males in this time received good wages for their work, they were able to purchase affordable property, available in abundance. The ownership of land in early America greatly helped its citizens in two ways. Land, priced inexpensively, enabled people to buy property and settle down at a young age. This provided them with the material assets to start a family. People were able to form strong, loving families at a young age. The second major value of possessing property was that only men who owned property could represent the nation in politics and vote for those representatives. Some of the founders believed that restricting voting to property owners only was a benefit to society. They thought that those who did not have property were not invested in America. Property owners were understood to have a stake in society and were believed to have more interest in the government regarding the well-being of their property. On a practical level, many held the view that by owning property you were not controlled by a landlord or other landowners. Concrete ownership meant that one could start and raise a family and participate in politics. Having a majority of citizens earning high wages and owning cheap property led to greater wealth equality. 

The Founders took special care to establish policies that would protect the economic situation of America as described above. They enacted strict laws for immigration into the United States. Creating a standard of attributes for immigrants desiring to come to America, the Founders only wanted hard working, moral people entering America—people who would easily assimilate into the American middle class. In an essay titled Information to Those Who Would Remove to America, Benjamin Franklin tells people who wish to immigrate to America that, “a general happy Mediocrity… prevails. There are few great Proprietors of the Soil, and few Tenants; most People cultivate their own Lands, or follow some Handicraft or Merchandise.” He goes on to warn foreigners that scholars, men of high offices and people who practiced the fine arts are not highly revered or valued in the American economy. Rather, the middle class laborer who worked for wages, or who provided for himself, owned property, and raised a family was going to be upheld as the pinnacle of success. By painting the middle class worker as the icon of success, the founders sought to attract individuals who had a spirit of virtue and who were willing to participate in the American economy. The middle class would be destroyed if people came to the United States with ambitious goals of holding grand public offices or exercising power over fellow Americans. The Founders hoped that if they restricted immigration to moral laborers the country’s economy would be not only preserved but strengthened. 

The Founders believed that tariffs played a key role in protecting the American economy. The purpose of tariffs was multifaceted. First, they encouraged American industry and also strengthened the domestic American economy. The placing of the tariff (essentially a tax) on imported goods from other countries disincentivized people from buying foreign goods which generated a higher demand for American made goods. This demand for more American-made goods encouraged the working individuals and businesses of the United States to increase their production of goods. Increased production required companies and tradesmen to hire working men at a faster rate to keep up with the demanded goods. The Founders wisely knew that enforcing tariffs would not only protect American labor but increase the amount of jobs the economy could offer which would strengthen its economy. 

The second reason for tariffs, according to the Founders, was the benefit of increased revenue for the American government, with less hardship for its own citizens. If the US government did not receive revenue from tariffs it would have to raise money by taxing American workers’ wages. An income tax on middle class laborers would discourage them from working a job. Levying a high tax on cigarettes is an everyday example of a disincentive because they harm one’s health. Driving at a high speed is dangerous, thus one can be taxed in the form of a ticket. It would be incongruous with this principle if the government taxed working citizens’ incomes but sought to encourage and promote labor. The Founders knew that by relying on tariffs to raise the revenue for the national government, citizens would have an incentive to work and be promised the full fruits of their own labor.  

Unquestionably, the Founders’ policies regarding immigration and tariffs preserved and boosted the economy of the United States. The economy which offered cheap land to all and high wages to workers led to greater wealth equality. Tariffs were instituted by the founders to protect American labor and to raise revenue for the government to save workers from having their wages taxed. The Founders encouraged a strong economy that could protect the nation and maintain political stability. In order for this to happen the economy needed a strong middle class that through labor could accumulate wealth and comprise the majority of the national economy. 

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