Constitutional Economic Transition

Russell Hardin

in Liberalism, Constitutionalism, and Democracy

Published in print November 1999 | ISBN: 9780198290841
Published online November 2003 | e-ISBN: 9780191599415 | DOI:
 Constitutional Economic Transition

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The US Constitution embodied a limited degree of laissez faire, enough to give capitalism at least an advantage over any other economic organization of the society if Adam Smith's theory is roughly right. What capitalism mainly needed was free markets, and the US Constitution went very far toward providing that interstate commerce would not be trammeled by the states acting for narrow interests against farmers and producers in other states. In the conflicts between commerce, small farming, and plantation agrarianism, nearly neutral government was good for the longer‐run workability of the constitution and its government. The fundamentally important issue in the design of constitutions is to enable rather than hinder economic transitions that are not well understood in advance. When the economies of eastern socialist regimes ceased to benefit from centrally controlled mobilization to do what was already well done elsewhere, their Communist governments were an obstacle to developing in other ways and, in particular, to making the transition to market economies.

Keywords: capitalism; centralization; Communism; free markets; interstate commerce; laissez faire; transition; US constitution

Chapter.  19286 words. 

Subjects: Political Theory

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