Woody Holton and the Soul of the Constitution

Todd Burst
Sep 8, 2018 · 3 min read

Contrary to popular opinion, the soul of the American Constitution has nothing to do with the various amendments or the protection of civil liberties. Its soul is economic, capital intensive, and less ideological than once believed. The Articles of Confederation gave states more rights than the Constitution and today, there are many Americans who believe that this country would be better off if the states had remained more sovereign. They have their own theories about when and why the federal government grew. Two of the most famous examples are President Lincoln and Franklin Roosevelt’s response to the Depression and Keynsian economics. However, what they fail to mention are the intention of the authors of the Constitution, who decided to reign in democracy, because it was protecting debtors at the expense of financial stability, the flow of capital, the protection of debts, and the enforcement of contracts.

In “The Capitalist Constitution,” historian Woody Holton follows Charles Beard’s Economic Interpretation of the Constitution of the United States, but unlike Beard Holton faces less criticism from the overzealous anti-Marxists who heavily criticized his work. Today, Holton’s work is part of the new history of capitalism and does not follow the teleological narrative of Marxism or Liberalism. Instead of putting American history on the path of economics, the new history of capitalism views these paths as congruent, growing, and morphing both together and apart as if they were not always two isolated events. Capitalism, as we know, got its name from its antagonists — not its proponents — and it capitalism is more often associated with the 19th century, though there are certainly tell-tale signs of its origins in the 17th and 18th century, but as we see with Holton’s writing, state craft, democracy (or anti-democracy) are often complimentary or congruent discourses as they build and feed off of one another.

The Federalists deemed Article I, Section 10 as the soul of the Constitution, because it prevented states from creating their own paper money and “adopting any law impairing the obligation of contracts.” America went through a recession after the Revolution. It struck the poor and farmers, those who were in debt. Farmers “frequently asked their representatives for [debt] relief” believing in the idea of democracy and their duty to represent the people, “state assemblymen had no choice, but to accede to their constituents.”

According to the men who wrote the US Constitution, its thirteen state level counterparts were so democratic — all the state’s constitutions…required legislators to face voters at least once a year — that state assemblymen [acting democratically] had np choice but to accede to their constituents.

Debt relief had dire consequences for the economy at large. First, it harmed creditors who refused to lend money, thereby restraining the flow of capital. “Prominent citizens,” believed that the government needed to adopt a new national charter that prohibited state assemblymen from coming to the aid of debtors. The Constitution did just that. It effectively transferred several key governmental responsibilities from regulating the relationship between debtor and creditor. The Constitution made it harder for average citizens to have a voice. This, in essence, was the soul of the constitution.

It is no secret why this gets so little attention, but with the advent of the new history of capitalism, rising domestic stratification and the power of the 1%, plus a pressurized debt economy, Holton’s essay reveals the genealogy of modern neoliberal capitalism. From a purely economic view, capital must flow, the public must feel confident, the poor must pay even if they cannot, and if democracy gets in the way it would not be the first time to remove it by redefining it into something like neoliberalism, where economic freedom somehow becomes the basis for American freedom even if the people are caught up in a kind of “debt peonage.”

  1. Woody Holton. “1. The Capitalist Constitution,” 2018, 35–62, 35.
  2. Ibid., 36
  3. Ibid.
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