Commercial Republic: A Hotbed for Rivalries?

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What is a commercial republic? Is the United States a commercial republic?

A commercial republic is a country like the United States, where commerce is an important part of the nation’s functioning. The Federalist Papers warn against the interstate conflict that can come with a republic where each state sets rules for commerce.

Find out what The Federalist Papers say about commercial republics.

The Danger of Commercial War

There was no reason to believe, as many opponents of the Constitution did, that a commercial republic like the United States would be less prone to foreign wars than a monarchy. Republics, because they contain representative institutions, are liable to be driven to acts of aggression when the people become impassioned by some perceived slight against them; and commercial rivalry had historically been just as much a cause of war as had royal vanity.

Indeed, commercial republics like the Netherlands, Venice, and even ancient Athens had been constantly at war with their neighbors. In a disunited America, mutually hostile confederations would inevitably come to seek the aid of foreign powers in order to secure advantage over their rivals. They might even invite foreign armies to land on American soil to defeat their neighbors. Thus, America would become like Europe—a war-torn continent of competing nations, each meddling in the others’ internal affairs.

Any functional national government needs to have the ability to manage its relations with other countries. This would be especially important for a commercial republic like the United States.

Trade Treaties for a Commercial Republic

Any functional national government needs to have the ability to manage its relations with other countries. This would be especially important for a commercial republic like the United States.

The Constitution expressly authorized the federal government to make treaties with foreign nations and regulate the commerce with them. The national government was the only logical place to lodge this authority; under the Articles of Confederation (as we’ve seen), the individual states had a dangerous amount of leeway to conduct their own de facto foreign policies. 

Interstate Commerce

It would make little sense for the new government to be able to regulate international commerce without being able to regulate interstate commerce. The Constitution greatly simplified the economic relationships between the states by granting the federal government the sole authority to unilaterally impose tariffs and duties on imports.

Thus, states could no longer (without the consent of Congress) put tariffs on imports from other states. Under the Articles, states taxed the products of other states in a protectionist effort to boost their own domestic goods. This led to higher prices for both producers and consumers, uncertainty about true prices, the general depression of commerce, and widespread evasion.

Commercial Republic: A Hotbed for Rivalries?

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Rina Shah

An avid reader for as long as she can remember, Rina’s love for books began with The Boxcar Children. Her penchant for always having a book nearby has never faded, though her reading tastes have since evolved. Rina reads around 100 books every year, with a fairly even split between fiction and non-fiction. Her favorite genres are memoirs, public health, and locked room mysteries. As an attorney, Rina can’t help analyzing and deconstructing arguments in any book she reads.

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