Filed under: Capitalism, Economy, Freedom, History, Law, Politics, The United States | Tags: Articles of Confederation, Becoming a Nation, The Continental Congress
The word “American” was first used to denote a person of European descent living in British North America only in 1765, but became common after that. Previously people had been citizens of various British colonies.
There was no “United States” at that time. There was a Continental Congress and a Continental Army and Navy. The states had agreed to a basic framework of government in 1781— the Articles of Confederation — to replace the administration of the Second Continental Congress. The power was invested in Congress, members were appointed by state governments and served at their pleasure. It had no power to tax. Foreign nations noticed that America was essentially powerless and they took advantage of that fact.
John Steele Gordon notes that “it was by no means the least of the lucky breaks that the United States has had in its history was the time at which it came into existence and established its fundamental laws:”
In one of history’s great coincidences, Adam Smith published
The Wealth of Nations in 1776. It destroyed the intellectual underpinnings of the mercantilism on which the economic policies of Western nations had been based for two hundred years.
It showed in example after example, each more powerfully argued than the next, that unfettered trade, both within and without the country, and a government that did not take sides as individuals competed in the marketplace resulted in greater prosperity for all and thus greater power for the country as a whole. Many of the Founding Fathers had read Smith, and all knew the thrust of his arguments.
The United States was new and didn’t have all sorts of long-established monopolies and systems to be dismantled. No entrenched aristocracy, and being new, was open to new ideas. It was easier to adopt the ideas of Adam Smith into its politics and economic system than it was for other Western nations. Just one of the lucky breaks we got at the establishment of the Nation.
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