by Eric Schliesser
Introduction
In an important 2007 paper, “Federalism and the old and new liberalisms,” Jacob T. Levy uses a chapter, “On Municipal Power, Local Authorities, and a New Kind of Federalism,” from Benjamin Constant’s Principles of Politics Applicable to All Representative Governments, to frame his interpretation of American federalism. Levy’s paper — a retelling of the story of American federalism from the perspective of liberalism — is important because it is directed at “all liberals who understood federalism as a means, and freedom as the end.” (Emphasis added.)
In an early footnote Levy quite rightly cites Montesquieu’s The Spirit of the Laws (1748), part II, book 9, chaps. 1–3, as a relatively slim (it’s only a few pages) background for the American political experiments in federalism which Levy presents.1 While Montesquieu undoubtedly loomed large in the American founding, in the American context, Levy argues elsewhere, “we lack heirs of Montesquieu for them to bother arguing against. Accordingly, federalism is almost entirely absent from the work of John Rawls and from the generation of liberal theory he inspired.”2
As Levy puts it, in practice, American federalism “evolved as the unintended result of a series of compromises and power struggles, both among the states and between the states and the center.” While I share Levy’s interpretation of the American experiment with federalism, this paper is rooted in two reservations about his approach. First, I doubt whether for Levy’s intended American target audience Constant has much status. So it may be worth looking at an alternative framing for the same end. Second, while Montesquieu is undoubtedly significant to the story of the American founding, there were rather important English language contributions to the eighteenth century discussion about federalism. I view the present paper as a preliminary contribution to an American reframing of Levy’s argument.
I tell the story in reverse chronology. In section 1, I briefly introduce Adam Smith’s plan for a (federal) parliamentary union of the British Atlantic empire. He proposed it at the end of the Wealth of Nations. In addition to sketching some of the key issues in his proposal, I also explore the nineteenth century reception of Smith to tackle a widespread and enduring misperception of Smith that treats his economics as a depoliticized project. In the second and main section, I focus on William Penn’s proposal for a federal European parliament to tell a fresh story about English language discussions on federalism, including – in addition to Penn and Smith – David Hume and Benjamin Franklin.
Section 1. Adam Smith’s federal Union.
It is fair to say that (amongst its other aims) Friedrich List’s 1841 The National System of Political Economy is one long polemic against Adam Smith. List summarizes his main criticisms in Book 3, in the fourth chapter, “The System of Values of Exchange (Falsely termed by the School, the ‘’Industrial’ System)—Adam Smith.” That fourth chapter follows the one on the Physiocratic system; this is altogether apt because List repeatedly treats Smith as wholly derivative of the physiocrats. The first lines of the fourth chapter:
Adam Smith’s doctrine is, in respect to national and international conditions, merely a continuation of the physiocratic system. Like the latter, it ignores the very nature of nationalities, seeks almost entirely to exclude politics and the power of the State, presupposes the existence of a state of perpetual peace and of universal union, underrates the value of a national manufacturing power, and the means of obtaining it, and demands absolute freedom of trade. Adam Smith fell into these fundamental errors in exactly the same way as the physiocrats had done before him, namely, by regarding absolute freedom in international trade as a demand of reason [Forderung der Vernunft] assent to which is demanded by common sense, and by not investigating to the bottom how far history supports this idea.3
It is safe to say that List’s (caricature) presentation of Smith has been incredibly influential on the reception of Smith (and liberalism more generally), especially in international political economy.
Now, in context List himself appeals to (a misrepresentation of) Dugald Stewart’s biography, but here I focus on something in List’s lines that is not in Stewart at all, that Smith’s system “presupposes the existence of a state of perpetual peace and of universal union.”
Contemporary and nineteenth century readers may well think of Kant here. After 1842 English readers may well think of Bentham (when Bentham’s early Smith-inflected work on perpetual peace was published4). But earlier in The National System of Political Economy, in chapter 11 of Book 2, List had suggested (again with a contextual nod to Dugald Stewart and physiocracy), “Adam Smith naturally understood under the word ‘peace’ the ‘perpetual universal peace’ of the Abbé St. Pierre.” Abbé St. Pierre inspired a famous work by Rousseau, which is (together with Abbé St. Pierre) clearly in the background of Kant’s Perpetual Peace and, as List (correctly) implies, Wealth of Nations.
I mention Kant, also, because what I am about to ascribe to Smith was also how Kant (and Bentham, and Constant) read Smith on my view. Now, as is well known, Adam Smith has many reasons for defending the benefits of free trade. However, there is one that is worth quoting here in light of List’s misrepresentation. For Smith free trade generates the development of a peaceful (continental) empire: “Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire.” (WN 4.5.b.39, 538) To be sure, this literally says that [I] free trade is structurally analogous to life under empire. But since in wider context he is arguing for free trade, this can also be read as: [II] if one adopts free trade, as Smith urges, the trading parties will seem transformed and politically integrated as if or structurally analogous to (“resemble”) a continent-wide empire.
Given [II], lurking in Smith’s economic arguments for free trade is a functionalist argument in which free trade leads to a kind of pacific political integration. For students of EU politics this is a very familiar argument pattern. It was, as I first learned from Chris Brooke, also very influential in List’s own time in the hands of Cobden and Bright. This functionalist argument for free trade does not presuppose international peace — in Smith it is offered in a polemic against mercantile ‘spirit of war’ and in the context of a renewal of potentially global war between France and Great Britain triggered by the ‘American disturbances’ — but is meant to generate at least regional peace.
Now, if one is not familiar with Smith’s writings, one may still suspect that List is onto something about Smith when he writes that Smith “almost entirely” excludes “politics and the power of the State.” I have addressed this charge in more general terms elsewhere. But it is worth noting that Smith’s functionalist argument is accompanied, inter alia, also by a specific plan for a federal parliamentary union, which he calls the “States General of the British Empire,” and presents as a “completion” of the British constitution. This Empire is itself meant to be a free trade area. Smith presents his proposal for federal parliamentary union as an extension of “the British system of taxation…to all the different provinces of the empire.” That is, he projects it as an act of ongoing state-building. So rather than ignoring politics, Smith requires great statesmanship.
So, the two, the functional argument and the political project for the federal parliament, complement and strengthen each other. While modern commentators have been relatively uninterested in exploring the details, Smith’s idea for a parliamentary federalism was, in fact, debated throughout the nineteenth century in Britain and so it is a bit odd (from a scholarly perspective) that List ignores it.
It is worth noting that Smith’s proposed rhetoric — which proposes a major reform as an inherent teleological end-point (“completion”) of the British constitution – echoes Blackstone’s anti-Lockean interpretation of the events of 1688:
But, while we rest this fundamental transaction, in point of authority, upon grounds the least liable to cavil, we are bound both in justice and gratitude to add, that it was conducted with a temper and moderation which naturally arose from its equity; that, however it might in some respects go beyond the letter of our antient laws…it was agreeable to the spirit of our constitution, and the rights of human nature; and that though in other points (owing to the peculiar circumstances of things and persons) it was not altogether so perfect as might have been wished, yet from thence a new era commenced, in which the bounds of prerogative and liberty have been better defined, the principles of government more thoroughly examined and understood, and the rights of the subject more explicitly guarded by legal provisions, than in any other period of the English history.
Notice how Blackstone explicitly allows that the spirit of the constitution was left imperfect by the Glorious Revolution. Smith’s federal proposal presents itself as moderate in character and as part and parcel of the spirit of British constitutional order. As Smith puts it in The Theory of Moral Sentiments, when a government reforms, “If those . . . principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful.” As Levy has emphasized throughout his writings, including on Smith, reform needs to proceed along the grain of society’s tendencies.
Smith also mentions two other explicit political, potential benefits of federal parliamentary union: first, it would solve the oppression of “the middling and inferior ranks of people in Scotland” from “the power of an aristocracy which had always before oppressed them.” Second, it would solve oppression “of all ranks in Ireland [who] would gain an equally complete deliverance from a much more oppressive aristocracy” ground “in the most odious of all distinctions, those of religious and political prejudices.” That is, Smith sees parliamentary union with the colonies also as a means to resolve a number of intractable political and moral problems that were the consequence of both English colonization of Ireland and English Union with Scotland. He seems to expect that in a wider polity good governance demands a more homogeneous, and simultaneously more tolerating, rule of law.
Now, as is well-known by now, Smith was well read by the American founders. But to the best of my knowledge his federalism has not been connected with theirs. This is due to the fact that there is a common source, Hume’s “Idea of a Perfect Commonwealth,” whose impact on Madison is much celebrated.5 Smith’s relationship to Constant’s federalism is definitely a topic I wish to return to (since we know that Constant was a very serious reader of Wealth of Nations).What I argue in what follows is there also another more ‘American’ work that may well have inspired Hume and Smith’s ideas on federalism, and that would have shaped the American reception of them: William Penn’s 1693 “An Essay towards the Present and Future Peace in Europe.” This work is sometimes remarked upon in so-called peace studies and in the pre-history of European union, but it has made a negligible impact on political theory and the study of American federalism in its Enlightenment context. This is a bit odd, because Voltaire was a big admirer of Penn. Arguably Penn is the hero of Voltaire’s Philosophical Letters or Letters on the English.6
Section 2. William Penn’s federal European parliament.
Back in 1974-5 Patrick Riley quite rightly noted that Voltaire was a fierce critic of Saint-Pierre’s peace plan. But as Riley notes, Voltaire granted that “the establishment of a European Diet could be very useful!” And as Riley goes on to summarize Voltaire’s views he notes that such a Diet could have powers for “settling commercial questions, in resolving conflicts between different national laws in international dealings; he even granted that princes could be persuaded to allow arbitration of disputes by such a Diet, since it is possible to convince a ruler that “it is not in his interest to defend his rights or his pretensions by force.” As I now proceed to show this echoes Penn’s views.
The core of Penn’s project is mentioned in the subtitle of his work: “the Establishment of a European Dyet, Parliament, Or Estates.” In the work he sometimes calls it a “general Dyet” or “The Soveraign or Imperial Dyet, Parliament, or State of Europe.” In certain respects this is inspired by The Imperial Diet of the Holy Roman Empire, but the whole project is clearly modelled on The Dutch Estates General, which he makes explicit in his conclusion (including a favorable mention of Sir William Temple’s Account of the United Provinces). I return to this below.
Now at first sight Penn’s proposal is an instance of what Constant would call the “old federalism.” This older federalism “is compatible both with internal despotism and external anarchy.” (This is part of the epigraph that Levy quotes.) For in the old federalism, states entered into mutual defense and non-aggression pacts, but did not interfere in each other’s domestic affairs. Penn’s proposed European parliament, on the other hand, is composed of deputies that represent then-existing nations. Most of the sovereigns are monarchs, and many of them having absolutist pretensions and are by no means enlightened. In addition, Penn allows that territory can be held through marriage and other dynastic mechanisms that would seem at odds with the new federalism.
Before I respond to the worry that Penn is an old federalist, I mention some characteristic features of his plan. The parliament will be composed in proportion to the taxable revenue of the underlying nation. (As we have seen, Adam Smith adopts a similar form of representation in his proposed Parliamentary federal union.) But the relative differences in deputies is fixed. It is worth noting that some of the nations involved (e.g., Germany, Italy,) are by no means unified when he is proposing this (in some cases not even informally), so there is an anticipatory element to this scheme.
In fact, Penn’s proposals echo Émeric Crucé’s Le Nouveau Cynée (1623; known as The New Cyneas), which goes unmentioned by Penn, and is also clearly inspired by the “Grand Design” of Henry IV (which is mentioned) as articulated by Sully, both of which were well-known during the seventeenth century.7 Not unlike Crucé, Penn proposes to include Muslim Turkey (then a great power) and Orthodox Russia in the project. So, Crucé and Penn are cosmopolitans about civilization and religion.
In principle the parliament can rotate among its members: “The Place of their First Session should be Central, as much as is possible, afterwards as they agree.” (Section VII.) This also anticipates Smith (who thought the imperial parliament could rotate toward the areas that contribute most taxes.) Echoing ideas we find in Spinoza (who also proposes a federal peace plan in his posthumous Political Treatise), Penn proposes a large number of parliamentarians and supermajority voting so as to make corruption rather expensive. He also proposes a secret ballot modelled on Venetian voting rules with urns. This mechanism was popular in English republican circles during the seventeenth century (Penn’s essay appears after the peak of such republicanism).
That there is a republican strain in Penn’s pamphlet alerts us to the fact that consent is crucial to his account. To quote the concluding slogan of the second section, “Thus Peace is maintain’d by Justice, which is a Fruit of Government, as Government, is from Society, and Society from Consent.” The argument in this chapter is clearly Lockean in character (in the sense that Blackstone understood him). Penn clearly assumes or stipulates that existing monarchs have a kind of tacit consent from their subjects. In addition, while Penn allows all monarchs to maintain the form of their rule, a number of them are ‘invited’ to transform themselves into constitutional monarchs of a certain type. (Penn offers an argument that this is also in the personal, psychological interest of the monarch.)
For, in fact, the federal parliament is thought to have the power to “compel” participation of even the strongest and most powerful monarchs into joining the federal parliament. (Section IX.) Earlier he was even more explicit that “if any of the Soveraignties that Constitute these Imperial States, shall refuse to submit their Claim or Pretensions to them, or to abide and perform the Judgment thereof, and seek their Remedy by Arms, or delay their Compliance beyond the Time prefixt in their Resolutions, all the other Soveraignties, United as One Strength, shall compel the Submission and Performance of the Sentence, with Damages to the Suffering Party, and Charges to the Soveraignties that obliged their Submission.” (Sect. IV). That is to say, unlike the old federalism, this is meant to have a political center that can impose unity where needed.8
Above I noted that Penn is inspired by Temple’s account of the Dutch united provinces. A key feature is that in its federal structure is that sovereignty is not unified, but fractured. I quote Penn:
For there we shall find Three Degrees of Soveraignties to make up every Soveraignty in the General States. I will reckon them backwards: First, The States General themselves; Then the Immediate Soveraignties that Constitute them, which are those of the Provinces, answerable to the Soveraignties of Europe, that by their Deputies are to compose the European Dyet, Parliament, or Estates, in our Proposal: And then there are the several Cities of each Province, that are so many Independent or Distinct Soveraignties, which compose those of the Provinces, as those of the Provinces do compose the States General at the Hague. (“The Conclusion”)
In the Dutch system, the provinces and states general mimicked each other in political structure. This anticipates what Constant calls the ‘new’ federalism. The anticipation is partial because Dutch cities need not be democratic or representative in character (although they all had ruling councils drawn from eminent citizens). This was noted by Hume (who also drew from Temple). In “Idea of a Perfect Commonwealth,” Hume remarks, in discussing one of his own improvements over the Dutch practice, that he corrects “the unlimited power of the burgomasters in the towns, which forms a perfect aristocracy in the Dutch commonwealth…by a well-tempered democracy, in giving to the people the annual election of the county representatives.” (IPC 66, Mil 526)
As I have indicated, Hume and Smith echo some crucial features of Penn’s proposal. Smith’s language even echoes Penn’s when he calls his own proposal the “States General of the British Empire.” (WN 5.3.68, 933)
While Penn was very famous, I have not found eighteenth century discussions of Penn’s pamphlet. However, in 1697, Penn penned another pamphlet, “Briefe and Plaine Scheam” for Union. And this was widely discussed. It was to include all the American English colonies. Penn’s plan promoted a colonial assembly, “their business shall be to hear and adjust all matters of Complaint or differences between Province and Province.” In addition, and this is said to address “the chief cause of the said difficulties,” namely, “to prevent or cure injuries in point of commerce.” In addition, it allows for raising a militia “to consider of ways and means to support the union and safety of these Provinces against the publick enemies in which the Quotas of men and charges will be much easier, and more equally sett, then it is possible for any establishment made here.”
Many of the mechanics of the 1697 scheme are derived from the earlier 1693 European peace plan, including an annual assembly of deputies, presumably selected by their local assemblies. This is a major step toward the new federalism. They would decide by plurality of votes with equal votes for each colony. And, as suggested, this triggered further plans of colonial union throughout the eighteenth century.
One of the most influential of these, is the Albany plan of 1754 (usually seen as the origin of American federalism). This involved delegates from all the colonies. It adopts some of Penn’s favored features: including the provision for rotation of the “grand council;” the proportionate representation in terms of a province’s tax power; the fixing of minimum and maximum number of deputies; and “they have power to make laws, and lay and levy such general duties, imposts, or taxes, as to them shall appear most equal and just (considering the ability and other circumstances of the inhabitants in the several Colonies)” to achieve the goals of the union.9 One of the authors of this plan was a famous son of Pennsylvania, Benjamin Franklin.
Conclusion
The eighteenth century is full of odes to ancient almost divine legislators, who could set out or re-found the laws of their society. Undoubtedly, this shaped Voltaire’s high praise of Penn. William Penn was a slaveholder, and no saint. A high born Aristocrat who inherited incredible privilege. In his private dealings he could be quite gullible, too. But as legislator he is a useful exemplar to American liberals. Unlike many other colonists he avoided genocidal violence toward the natives, and, as Voltaire emphasized, tried to deal with them fairly. Penn combined a commitment to commerce, religious toleration, and equality, and successfully founded an incredibly prosperous and democratic Pennsylvania that was full of early critics of slavery. As I have argued in this piece, Penn was also an ardent federalist devoted to pacific relations. We find numerous echoes of his plans in the high theorizing of Hume and Adam Smith.
NOTES
- My view is that in these chapters Montesquieu is rather indebted to Spinoza’s Political Treatise. ↩︎
- It is worth noting that in mid-twentieth century neoliberalism, we do find alternative resources in the writings of Walter Lippmann, Calvert Simons, and James Buchanan. But these did not become mainstream in American political theorizing. ↩︎
- I have used Sampson S. Lloyd’s 1885 translation in the Origami Books (2022) reprint edition. But This translation is not always reliable. ↩︎
- See my (ms) “The reception by Bentham and Kant of Adam Smith’s argument for functional integration and Federalism and the fate of Perpetual Peace.” ↩︎
- The locus classicus is Adair, D. 1965. “‘That Politics May Be Reduced to a Science’: David Hume, James Madison, and the Tenth Federalist.” Huntington Library Quarterly, 20(4), 343–360. For recent work, see Sakamoto, Tatsuya. “Hume’s Idea of a Perfect Commonwealth Revisited.” Dialogue and Universalism 1 (2022): 47-64. ↩︎
- Burke is more critical of Penn’s writings, but also highly praises Penn’s legislative achievements in his An Account of the European Settlement in America (1757), chapter XI. ↩︎
- For a rather deflationary analysis that puts Sully’s project in context, see Eliav-Feldon, Miriam. “Grand Designs The Peace Plans of the Late Renaissance.” Vivarium 27.1 (1989): 51-76. ↩︎
- This also alerts us that the ‘old federalism’ already anticipates non-trivial features of the new federalism because Sully’s “Grand Design” also presupposed to use compulsion to force people into it. See Eliav-Feldon op. cit. ↩︎
- On the complex imperial context of the Albany Plan, see Pincus, Steve. “Confederal Union and Empire: Placing the Albany Plan (1754) in Imperial Context.” Journal of British Studies 62.3 (2023): 589-617. William Penn’s grandson was one of the Pennsylvania commissioners s to the Albany conference. See Trask, Roger R. “Pennsylvania and the Albany Congress, 1754.” Pennsylvania History: A Journal of Mid-Atlantic Studies 27.3 (1960): 278-9. For the connection between the Albany Plan and Benjamin Franklin, see Mathews, Lois K. “Benjamin Franklin’s Plans for a Colonial Union, 1750–1775.” American Political Science Review 8.3 (1914): 393-412. ↩︎
Eric Schliesser is professor of Political Science, with a focus on Political Theory, at the University of Amsterdam’s Faculty of Social and Behavioural Sciences. He blogs at Digressions and Impressions. Send him mail.
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