Guest Essayist: Dr. Charles K. Rowley, General Director of The Locke Institute and Duncan Black Professor Emeritus of Economics at George Mason University

The Articles of Confederation and Perpetual Union was an agreement among the thirteen founding states that established the United States of America as a confederation of sovereign states and that served as its first constitution. The Second Continental Congress began to draft the Articles on June 12, 1776, and sent an approved version to the states for ratification in late 1777.

The first state to ratify the Articles was Virginia on December 17, 1777.  The last state to ratify was Maryland on March 1, 1781, and then only when Virginia and New York agreed to cede their claims in the Ohio River Valley.  The ratification process dragged on because several states refused to rescind their claims to land in the west.

Prior to ratification, the Articles provided domestic and international legitimacy for the Continental Congress, enabling it to direct the American Revolutionary War, to conduct diplomacy with European nations, and to deal with territorial issues and Indian relations.  War to defend territories against a powerful common enemy is a glue that holds disparate groups together. So it was with the thirteen states, though the adhesive had to be strengthened by the superb diplomatic as well as military skills of General Washington.

Isolated at Yorktown, reinforcements and supplies denied to him by the French fleet, General Cornwallis surrendered on October 19, 1781.  So the British, who had begun the war with an enormous superiority in trained men and with complete control of the sea, ended it outnumbered, outgunned, and with the French ruling the waves. The British still held New York, Savannah and Charleston, but the catastrophic defeat at Yorktown had knocked the stuffing out of the British war-party.

On March 19, 1782, Lord North resigned, making way for a peace coalition which contained Shelby, Fox and Edmund Burke. A series of brilliant British naval victories against France and Spain reasserted Britain’s absolute command of the seas, and paved the way for the nation to swallow its pride and to accept an independent America.

The peace by no means brought immediate benefits to all of the former colonies.  The struggle had told heavily on their primitive political organizations.  The Articles of Confederation had established a weak central government, enjoying only such powers as they might have allowed to the British Crown.  Their Congress had neither the power nor the opportunity, across so vast a land, of creating an ordered society out of the wreckage of revolution and war.

The strongest element behind the American effort had been the small farmers from the inland frontier districts.  It was they who had supplied the men for the Army and who had in most of the states refashioned the several constitutions on semi-democratic lines.  They now dominated the legislatures and jealously guarded the privileges of their respective states.

The newly independent America was rent by powerful conflicting interests.  The farmers were heavily in debt to the city interests.  The excessive issue of paper money by Congress had fueled inflation. By 1780, one gold dollar exchanged for forty paper dollars.  Every state was burdened with enormous debts ands taxes imposed to meet the interest on such debts fell heavily upon the land.  Small impoverished farmers were everywhere confronting foreclosure while war profiteers were rampant.

A gulf was widening across America between debtor and creditor, between farmer and merchant-financier.  Agitation and unrest marched in tune with the deepening economic crisis.  There were widespread movements for postponing or cancelling the collection of debts.  In Massachusetts in the fall of 1786, farmers and disbanded soldiers, fearing foreclosure on their mortgages, rose in Shay’s rebellion, storming the county courts. Even as fervent a protector of private property as George Washington commented: ‘There are combustibles in every state which a spark might set fire to.  I feel infinitely more than I can express for the disorders that have arisen.’

Shay’s rebellion was the spur to action.  In May 1787, a convention of delegates from twelve of the states gathered in Philadelphia to consider the darkening situation.  The partisans of a strong national government were in a large majority.  Of the potential leaders of the farmers — or agrarian democrats as they now were called — Patrick Henry of Virginia refused to attend and Thomas Jefferson was still dallying in Paris.

In their absence Alexander Hamilton, who represented the powerful financial interests of New York, assumed a leadership role.  Hamilton became the recognized leader of those who demanded a capable central government and a limitation of states’ powers.  He was opposed by delegates from the small states who were anxious to preserve equality among the thirteen states.

All the delegates came from well-established centers on the Eastern seaboard.  They all realized, however, that their power and influence would soon be challenged by the growing populace of the West.  Here, beyond the Ohio and the Alleghanies, lay vast territories which Congress had ordained should be admitted to the Union on an equal footing with the original states as soon as they each contained 60,000 inhabitants.  Population growth across those territories was rapid and the day of reckoning for the original thirteen would soon arrive.  The thirteen had fought to expel the British and the thirteen felt, with justification, that they knew more about politics and the true interests of the Union than the denizens of half-settled regions.  As Gouverneur Morris of Pennsylvania succinctly put it: ‘The busy haunts of men, not the remote wilderness, is the proper school of political talents.  If the Western people get the power in their hands they will ruin the Atlantic interests’

The power and the future lay with the West and this recognition, perhaps more than any other, propelled the Convention to address the framing of a new Constitution of the United States. In the meantime, from his watch-tower across the Atlantic Ocean, Thomas Jefferson – author of The Declaration of Independence and the most eloquent defender of decentralized republicanism — fretted about developments in Philadelphia, most especially about the powers that would be vested in the executive branch.

Jefferson’s principal fear, correctly, was that the presidency might prove to be the Achilles heel of a democratic republic: ‘He may be reelected from 4 years to 4 years for life. Reason and experience prove to us that a chief magistrate, so continuable, is an officer for life. When one or two generations shall have proved that this is an office for life, it becomes on every succession worthy of intrigue, of bribery, of force, and even of foreign interference.’  In fewer than 150 years, Franklin Delano Roosevelt would become the personification of Jefferson’s nightmare. Fortunately, however the republic had the good sense never to allow an FDR autocracy to recur.

The Articles of Confederation failed, not necessarily because they were inadequate in principle — after all they had worked sufficiently well to overthrow the British Empire — but because the thirteen states did not comprise an optimal economic union immediately following Independence.

When an economic union is ill-formed, and internal stresses begin to dominate, the absence of a strong central government, able to enforce both a common fiscal policy and a common monetary policy and to raise an effective military capable of suppressing internal rebellion and external invasion, is a fatal weakness, as the euro-zone is currently demonstrating

From this perspective, Alexander Hamilton was bound to win the battle for and against strong federal centralism in Philadelphia in 1787.  Whether or not, in the light of events that flowed from that victory, Alexander Hamilton, and his federalist co-author, James Madison, still rest easily in their graves must be doubtful.  Surely Thomas Jefferson and Patrick Henry must be tossing in their graves to witness the destruction of states’ rights and the surrender of individual liberty that have gone hand in hand with the advance of central government and the emergence of the Imperial Presidency.

March 26, 2013 – Essay #27

Read The Articles of Confederation here:

Charles K. Rowley is Duncan Black Professor Emeritus at George Mason University and General Director of The Locke Institute in Fairfax, Virginia ( . He has written extensively in the fields of classical liberalism, economics, public choice law-and-economics and political history. He publishes a daily blog at

2 replies
  1. Ron
    Ron says:

    Thanks for presenting the story of the transition from the Confederation to the Constitution, Dr. Rowley. Our lack of success with the confederation has always had me wondering how successful the confederation of the EU might be. It seems that history would argue against its success; I’m surprised that it has lasted so long already, especially considering that our founders realized that a confederation would not work so soon after putting it together. I suppose that today’s politicians believe that they are smarter than yesterday’s and that they are more capable of making a confederation work; I suspect that they will find otherwise in due time. Human hubris is evergreen.

  2. Charles Rowley
    Charles Rowley says:


    Loose confederacies often serve a useful purpose in exapnding trade between members. EFTA was such a grouping , as was the early EEC. However, for a political confederacy to work the central authority myst have certain authority – fiscal and monetary – and certain powers of enforcement. The Articles of Confederation failed in that regard as does the current eurozone.
    However, once powers are provided tro enable a confederation to defend its members, those powers can be used to redistribute wealth among the members. That is the danger that cannot be avoided, except by keeping a conderacy delibedsrately weak, as Patrick Henrywould have much preferred.


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