Dr. Trevor Shelley explains that America's economic system is best understood as a "commercial republic" rather than pure capitalism, revealing the philosophical tensions between unlimited commerce and the bounded nature of republican governance. The term "commercial republic" captures a balance between market-driven economic liberty and civic virtue that continues to define America's mixed economy.
• The term "capitalism" was coined by Karl Marx and carries derogatory connotations not used by the Founders themselves
• Commerce recognizes no limits while republics rest on specific boundaries, creating an inherent tension
• America's economy combines private property rights and market exchange with varying degrees of government intervention
• Key influences on the American economic system include John Locke, Montesquieu, David Hume, and Adam Smith
• Alexander Hamilton had the greatest initial impact on shaping America's economic approach
• 2026 marks the 250th anniversary of both the Declaration of Independence and Adam Smith's "Wealth of Nations"
• Smith's concept of the "invisible hand" shows how markets direct self-interest toward public benefit without government micromanagement
• The division of labor increases productivity as markets expand, a key insight that appealed to the Founders
Check Out the Civic Literacy Curriculum!
