Holton

Okay. I have tried to respond to Ryan's post four times. The comment does not seem to stick. Maybe "allow reader comments" has been disabled?

Update: I am apparently unable to respond to individual posts. So I will repost one of my responses here as a stand-alone comment.

 I read Holton's take on the Constitution as a mechanism for both economic stimulus (and by extension wealth generation) and wealth preservation. It would be naïve not to consider that it was the founders' wealth that was the target for preservation. Likewise, the chaos of circulating individual state currencies –rather than not enough capital to pay taxes (as one poster commented)– I read that there was not enough value in capital. The overabundance of paper money outpaced the ability of currency to purchase goods and services. I appreciate how Holton examines aspects of currency depreciation and the protection of bondholders.

Bondholders'value of the outstanding debt was eroded through hyperinflation (i.e. Jefferson's oak leaves analogy). Nevertheless, these same bondholders were reluctant to exchange their bonds for paper currency. It is a small point that Holton makes but nonetheless important: State and national currencies depreciated simultaneously. This piece of the story provides a significant part of the scaffolding upon which this historical narrative is assembled.

 Too, the chaotic relationship among competing state and national currencies damaged commercial enterprise. Economic development would be retarded while bondholders resisted trading in their bonds for national currency. This handicap was exacerbated with an unstable monetary system such that outside investment would be unavailable.

As I read Holton's position – the founders recognized this limitation and sought to correct the systemic deficiencies with a strong central government. This need to collect debts seems to factor into the creation of the federal court system ("full faith and credit" being an extension of this); also the ability to regulate the volume and velocity of capital to control inflation.

Holton asks if some states perceived that they would derive a greater benefit under the confederation rather than under the federal plan. I am looking at those points that were critical to adoption of the Constitution as a kind of trade-off when states relinquish power to the federal government. Then there is the aspect of unintended consequences. Did the founders, perhaps unwittingly, empower people in the lower levels of the economic ladder to attain greater control over their own destiny outside the circumscribed ideals of a strong central government?