Reading Reagan’s Rights

President Reagan loves historic anniversaries and quotations. Thus he plans to use this eve of Independence Day to issue an “Economic Bill of Rights” for Americans. This presumably is a fiscal counterpart to the Bill of Rights that comprises the first 10 amendments to the U.S. Constitution. The Constitution had little to do with the Declaration of Independence, of course, being separated by 11 years, a Revolutionary War and a considerable realignment of American attitudes toward government. No matter. The President clings fondly to his own simplistic notions of American history.

The basis of Reagan’s Economic Bill of Rights is his long-term crusade to free the people of the federal yoke so that they may go off on their own in the pursuit of happiness and money. This would be the ultimate extension of modern supply-side economics and economic Darwinism. The President will quote Thomas Jefferson and others to prove that this is what the Founding Fathers and the Framers of the Constitution intended all along.

The only problem with that thesis is that it is wrong. The Constitution, which really set the course for the country after the Declaration of Independence set it adrift, was in large part a reaction to economic chaos in the American colonies under the Articles of Confederation. If the states were to be united, they had to have a common currency. They had to have a centralized method of raising money for defense and the public welfare. There had to be ground rules for interstate commerce, and international trade, for the economy to flourish. Taxes had to be levied to pay off the public debt so that the new nation could have credibility with its trading partners abroad. In short, without government regulation of the economy there could be no united states.

A central government of checks and balances was needed to control competing political and economic factions and to protect minorities fromexploitation, James Madison said in article No. 10 of “The Federalist.” Referring to creditors and debtors, landowners, manufacturers and moneyed interests, among others, Madison wrote: “The regulation of these various and interfering interests forms the principal task of modern legislation and involves the spirit of party and faction in the necessary and ordinary operations of government.”

Among the issues to be settled through this cumbersome representative system, Madison wrote, were the fair and equitable apportionment of taxes and questions like “Shall domestic manufacturers be encouraged, and in what degree, by restrictions on foreign manufacturers?” The goal of the Constitution was not to set free the moneyed interests, or any other faction, to work their individual wills, but to restrain them for the common good and protection of private rights.

New Right conservatives, with the President’s ear, have rewritten American history to say that the Founders wanted Americans to be free to make a buck in whatever fashion they wanted. Everyone would benefit, they claim, because the results ultimately would trickle down, as in tax cuts for the wealthy. Poppycock. The Framers and true conservatives reject this radical notion. Madison said that the causes of human greed and power were inherent and could never be eliminated, so their evil effects had to be controlled--by government.

The Reagan Administration has tried to portray economic regulation by government as something un-American and alien to the interests of rich and poor alike. But the necessity of governmental regulation of the economy was not an accident of later history or the invention of Franklin D. Roosevelt. It was the bedrock of the Constitution --in Madison’s words, the principal task of modern legislation . That task remains as necessary and as vital today as it was in 1787.