3/17/09 - jefferson and small government

In today's excerpt - Thomas Jefferson though famed and revered for his 'small-government' philosophy was in his actions one of early America's most active practitioners of large-scale government intervention and activism buying the Louisiana territory without constitutional authority selling federal lands at below cost to ensure widespread ownership and developing a $20 million plan for building roads and canals:

"Jefferson was explicitly averse to expensive central government, federal indebtedness, and a central bank. He was an admirer of Adam Smith's 'invisible hand,' and probably read The Wealth of Nations years after it was published in England in 1776. ... A good government, Jefferson summarized in a letter during Washington's term, must be 'a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.'

"Thus, the philosophy was set in principle, but Jefferson violated it in practice. The pragmatic basis of American prosperity and freedom resided in one fact, about which Jefferson did not delude himself. Land was widely and inexpensively available. [Thus] Jefferson bought the Louisiana territory from Napoleon for $15 million, which he agreed to borrow. He willingly defied the Constitution's limits on his authority to do so without congressional approval. ...

"But there was another critical choice Jefferson made. The broad distribution of land he thought ideal could be accomplished only through government control and regulation. The federal and state governments owned almost all the unclaimed land at the start of the nation and Jefferson was among the early political leaders who were determined to be sure the land was sold at affordable prices and was widely owned. ... This was a powerful use of government even if land availability compared to the size of the population made low prices easier to implement. ... As the historian Frank Bourgin points out, the federal government was by far the largest owner of land in the nation, holding some 1.6 million acres at one point. It could have been a significant source of federal revenues. ...

"For all his disdain for government, Jefferson always sought to set aside federal land for schools. He was initially ideologically hesitant to use federal moneys for new roads, but by his second term he had changed his mind regarding the federal financing of roads. ...

"Jefferson had already approved the building of the Cumberland Road to connect the Potomac and the Ohio Rivers in 1806, which would become the largest public works project undertaken until the Erie Canal. He asked Albert Gallatin to prepare a comprehensive program of roads and canals to be implemented once the national debt was nearly paid off. Gallatin drew up an ambitious ten-year plan for the development of transportation that would cost a stunning $20 million, to be financed with bonds and paid off over time through tariffs and land sales. Jefferson believed a constitutional amendment was needed to authorize the spending. Perhaps he would have gotten it, but the embargo he imposed in 1808 on trade with Britain ended all such ambitious plans. 'The planning that took place in Jefferson's second term of office remains to this day so little known,' writes Frank Bourgin, 'that the student of American history must marvel at this fact.' "


Jeff Madrick


The Case for Big Government


Princeton University Press


Copyright 2009 by Princeton University Press


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