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American tradition of economic liberty comes from covenant theology

'Declaration of Independence' by John Trumbull
Wikimedia Commons/US Capitol

The American concept of government, including the order of property rights and free exchange, is unique and arose out of the disconnected relationship between the Crown and the Colonies. Although it is a compact; that is, a covenant structure in form (Declaration and Constitution), its actual manifestation solidifies the form of the American Union. Since nearly all civilizations had, in some form—a king as the head or master of its governance—the Great Experiment instituted this same form, but in an entirely distinctive, never before seen, structure.

Federalism is derived from the Latin word for covenant or treaty, foedus. Dr. Donald Lutz writes, “It is in a covenant-derived compact written by a deeply religious people who knew a great deal about the political and religious covenants in the Bible.” Dr. Alice Baldwin, in 1928, wrote in her extensive analysis of colonial pastors how deeply spiritual and Biblical these clergy believed the role of civil government was and saw it directly as an offspring of scriptural commands. She concluded that the clergy of New England understood the “conception of a covenant or compact as the foundation of divine and human relations [was] of basic importance in New England thought.” This belief was the genesis of America’s constitutional governance; that a compactual covenant of a social compact and constitution was a societal agreement with God. Christ’s Law brought liberty, and “those liberties were sacred, a part of the ‘divine constitution’[.] […] This law of God, natural [revelation] and written [revealed], was not only moral but also rational, and God expected obedience not so much because of His authority as because of its reasonableness and the benefits to be derived therefrom.”

As Cornell University historian, Brian Tierney, discloses, “Humans were bound by divine law, directly revealed by God, and by the precepts of natural moral law, discernible by human reason.” Hence, by the Laws of Nature and of Nature’s God. So would divine law be the foundation of the American Republic, as it had been the foundation of the Hebrew Republic. God’s hand and His Laws would rise these civilizations to levels unforeseen. The reason, discerned by the Enlightenment theorists like Locke and Montesquieu, would give our Forefathers and Founding Fathers the human reason to understand and implore God’s Law into the American Experiment. As colonial clergyman George Duffield preached in 1783 for a Thanksgiving Day sermon in direct reference to Micah 6:8 (as well as other Scriptural passages), as many of our Founding Fathers often did:

It is, that we love the Lord our God, to walk in his way, and keep his commandments, to observe his statues and his judgements. That a sacred regard be maintained to righteousness and truth. That we do justice, love mercy, and walk humbly with our God. Then shall God delight to dwell amongst us. And these United States shall long remain, a great, a glorious, and an happy people.

Dreisbach also disclosed that the founding generation connected the American Republic to the Hebrew Republic.

As King David so poetically and insightfully wrote and understood from his study and reading of the Torah, “I have kept my feet from every evil path so that I might obey your word. I have not departed from your laws, for you yourself have taught me.” He knew that obedience of God’s Laws, the Laws of Nature and of Nature’s God, kept both individuals and nations on the best trajectory to moral success and economic abundance.

In their astute analysis of the divinity of American constitutionalism tradition, Danial Elazar and John Kincaid noted, “In its heart of hearts, a covenant is an agreement in which a higher moral force, traditionally God, is either a direct party to or guarantor of a particular relationship.” While a compact is often thought of as a more secular document, in the American tradition a compact was a divine agreement; that is, a covenantal agreement with God always as the witness and as Elazar and Kincaid note, the divine guarantor.

In August of 1787, Reverend William Rogers, while preaching to a congregation including George Washington and other members of the Convention of 1787, pleaded with God, “DO THOU visit our land, graciously regard our country, protect and defend our infant, but hitherto highly favoured empire, bless our CONGRESS, smile upon each particular State of the UNION […] who compose our FEDERAL CONVENTION; will it please THEE, O THOU ETERNAL I AM! To favour them from day to day with thy immediate presence; be thou their wisdom and their strength!” Pastor Williams was tying Yahweh as the third, and most important, party of the compact, thus acknowledging it as a covenantal compact between the States and the Almighty Lord – a divine confederacy with the blessing of God.

This experimentation of societal compacts from 1620 to 1776 and beyond forged a vigorous amount of learning and engagement of covenant based societies by our Forefathers. “This flexibility of usage, notes Daniel Elazar, “is consistent with the biblical worldview which see the universe as built upon an interlocking and overlapping system of covenantal relationships.” Elazar continues, expressively describing it this way:

The omnipotent Deity, by freely covenanting with man, limits his own powers to allow man space in which to be free, only requiring of him that he live in accordance with the Law established as normative by the Covenant.  The Puritans’ recognition of this aspect of the covenantal relationship between God and man in sixteenth and seventeenth-century Britain and American became the basis of their ‘federal theology’ – inventing the term ‘federal’ (derived from the Latin foedus, meaning covenant) to express this theo-political relationship.

Dr. Pauline Maier correlates divine and natural law, noting that “to justify revolution” the various state and local legislatures of colonial America used “’the eternal laws of self-preservation’ or, as others sometimes said, ‘the first laws of nature,’ drew upon a politicized religious literature that equated the laws of God with the laws of nature and described self-preservation as ‘an instinct by God implanted in our nature.’” Maier goes on to connect this “contractual origins of government and the right of the people to judge their rulers” with the writings of John Locke, Sir William Blackstone(who, himself, referred to Locke’s work), and other 17th and 18th century English and Scottish jurist and philosophers. Maier concludes that the colonists had “both a contractual right and a God-given obligation to resist rulers attempting to destroy them.” And these rights and obligations come from the direct tie between the laws of nature and natural rights, divine law, and eternal law; all of which are corollaries of God’s Law. America’s economic preeminence depends on reviving the covenant theology on which the colonial generations depended. Our federal government is too large, precisely because we have forgotten that “federal” comes from foedus, i.e. covenant.

Jim Huntzinger is the President and Founder of Lean Frontiers, Inc., which develops knowledge and learning communities on the Lean Enterprise for business and industry. With a background and experience in manufacturing and operations, he has also extensively researched the history and development of American manufacturing and also published several books on the lean business model, manufacturing history, and economics.

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