STATE CAPITALISM IN POST-COLONIAL AMERICA

Forrest McDonald delivered a talk on Capitalism and the Constitution in which he concluded that they grew up at the same time but the Constitution was not made for Capitalism:

Did the Founding generation contemplate the creation of a capitalistic, free-market economy? No, the majority did not. Had the will of the majority prevailed, had the Jeffersonians prevailed, had those committed to pure republicanism prevailed, the United States would have remained an agrarian, colonial economy destined to become a collection of banana republics.

In Novus Ordo Seclorum, McDonald provides a clear example of what we now call "State Capitalism", (p. 102):

Massachusetts, for instance, had no agricultural staples of consequence and nothing significant to export except lumber, fish, and the potash and pearlash that were by-products of the clearing of land. Accordingly, its mercantilistic program was a complex one, involving bounties on exports, protective duties on imports, inspection laws, and, above all, the promotion of manufactures through a combination of what might be styled state capitalism and a partnership between governmental and private economic endeavor. In 1786, for example, on the recommendation of Governor James Bowdoin, the state required the several towns to establish potash and pearlash works and to produce certain amounts annually for export by the state government. At various times it also authorized lotteries to raise capital for the building of privately owned woolen mills, paper mills, glass works, and loaf-sugar mills; granted Simon Willard a five-year monopoly on the making and selling of clock jacks; and granted John Noyes and Paul Revere a fifteen-year monopoly on the manufacture of iron with the use of steam power. Such measures, combined with a new spirit of enterprise in some quarters, bore fruit.