George Washington’s economic policy

One of the reasons so little has been written about the economic policy of George Washington is, government way back then is nothing that it is today. The original founding fathers were libertarian.

They believed the government’s roles was to prevent the abuse of government powers on individual freedoms. They fought a revolution over it. It went without saying government intervention in trade between two private individuals or companies was not even something that needs to be debated.

The year 1776 was a paradigm shift. The Wealth of Nations by Adam Smith was published and the colonies declared their independence from King George III’s Mercantilist empire.

When the war ended Washington wrote in his farewell address he clearly outlined an economic vision for the United States.

Here is my complete ebook of  George Washington’s Farewell Address

Download Washington’s words above

I put this together for those who want to read first hand his parting words and vision. It is interest to note he talked about, free trade, taxes, a balanced budget.

Farmer Brown and Washington’s economics

If farmer Brown wants to sell corn to miller Thomas, what does that have to do with anyone else?

Washington’s vision of America stood in opposition to the strong central governments and managed mercantilist economies of England and France. He opposed entangling alliances, and world political policy. George Washington did not even want to have domestic political parties.

Government was to be a simple voice for the people. If George Washington was alive today I am sure he would be closest to a libertarian ideal, as would Jefferson and Madison. I am certain of this. Government was about representation and voice but not economics as it exists today.

Government bailouts, income redistribution, high taxes to support government programs would not even be a consideration. George Washington and the founding fathers would today fight for reducing the burden of government.

You might argue the economy in Washington’s time was not as complex. I would disagree. America not only had agriculture and manufacturing but services also. Of course it was not as complex in some ways but the basic structure was the same. Therefore, the same economic ideas are applicable.

You might ask what about government’s role of being a social state for people? The founding fathers never dreamed of this. The level of subsidence was much lower. The average person back during the time of George Washington did not live as well as the poor do in America today. And still there was not such thing as a social state. Tax and spend defies the ideals of the George Washington. No country was ever taxed into prosperity.

Washington wrote in his state of the Union:

…save the necessity of burthening our citizens with new taxes

Washington himself a Virgina plantation manager and businessmen before was concerned about British taxation and economic policy. England wanted the colonies to be under the burden of taxation and simply a supplier of raw materials for England to manufacture and process. Washington wanted to be free of such burden of government engineering of the economy.

And what about George Washington and government debt?

George Washington on government debt

Washington wrote in 1797 to Sam Washington:

There is no practice so dangerous as that of borrowing money

Speaking to the House of representatives Washington said:

No pecuniary consideration is more urgent than the regular redemption and discharge of the public debt. On none can delay be more injurious or an economy of time more valuable.

What amazes me is why if this is so clear and so many people understand that the United States was founded to protect people from the burden of government.

Where Washington did employ government

The issue with talking about a coherent economic policy of Washington, he was no ideologue. He did not have a unified view like Adam Smith. He was a pragmatist at war and business and with the government. After the revolution the US had a huge war debt. Alexander Hamilton (in opposition to Jefferson) established a Federal government with a central bank, taxation and currency system. Washington was not an anarchist anti-government man, rather simply a practical man, who believed in protecting citizens against government’s over extension into the economic life of people. What do you think George Washington would think America’s economic policy today?

Related Posts




This is my Youtube Channel: EconLessons


Leave a Reply