Civics In A Year
What do you really know about American government, the Constitution, and your rights as a citizen?
Civics in a Year is a fast-paced podcast series that delivers essential civic knowledge in just 10 minutes per episode. Over the course of a year, we’ll explore 250 key questions—from the founding documents and branches of government to civil liberties, elections, and public participation.
Rooted in the Civic Literacy Curriculum from the Center for American Civics at Arizona State University, this series is a collaborative project supported by the School of Civic and Economic Thought and Leadership. Each episode is designed to spark curiosity, strengthen constitutional understanding, and encourage active citizenship.
Whether you're a student, educator, or lifelong learner, Civics in a Year will guide you through the building blocks of American democracy—one question at a time.
Civics In A Year
Commercial Republic: Understanding America's Mixed Economy
Dr. Trevor Shelley explains that America's economic system is best understood as a "commercial republic" rather than pure capitalism, revealing the philosophical tensions between unlimited commerce and the bounded nature of republican governance. The term "commercial republic" captures a balance between market-driven economic liberty and civic virtue that continues to define America's mixed economy.
• The term "capitalism" was coined by Karl Marx and carries derogatory connotations not used by the Founders themselves
• Commerce recognizes no limits while republics rest on specific boundaries, creating an inherent tension
• America's economy combines private property rights and market exchange with varying degrees of government intervention
• Key influences on the American economic system include John Locke, Montesquieu, David Hume, and Adam Smith
• Alexander Hamilton had the greatest initial impact on shaping America's economic approach
• 2026 marks the 250th anniversary of both the Declaration of Independence and Adam Smith's "Wealth of Nations"
• Smith's concept of the "invisible hand" shows how markets direct self-interest toward public benefit without government micromanagement
• The division of labor increases productivity as markets expand, a key insight that appealed to the Founders
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School of Civic and Economic Thought and Leadership
Thank you so much for that question, and today I am really excited to have Dr Trevor Shelley, who is an assistant professor and director of graduate studies at the School of Civic and Economic Thought and Leadership, and somebody that I get to work with, so it is really great to have you on the podcast. Dr Shelley, can you help us answer this question?
Speaker 2:Yeah well, first of all, thank you very much, very glad to be here. You know, many argue that the US has a market economy or a system of a free enterprise, or what is otherwise known as capitalism, as it were. This latter word was originally coined by Karl Marx and so carries a degree of derogation, perhaps even still, and, moreover, none of these terms were used by the founders themselves. Perhaps, then, none perfectly capture really the complex nature of the economic system of the United States. The phrase that the founders used was that of commercial republic, which consists of two terms around which there was, and really continues to be, considerable disagreement about their true meaning, as well as whether they can or really do hang well together. Some tensions here between the commercial or economic and the Republican or political aspects of the American regime or system is worth highlighting, even if we can't go into them in great detail. But to put it simply, commerce seems to recognize no limits. Right, the whole world can be a market for individual and voluntary exchange. Well, on the other hand, a republic rests on specific limits and delineations, say of territory, population, powers and even values or a common good. One might engage in international trade, but one still remains, you know something, of a law citizen of a particular political community or regime, and to maybe put these tensions a little differently. Yet, commerce encourages the pursuit, if not the love, of wealth, while the spring of republics is really the practice, if not the love, of civic virtue.
Speaker 2:So, with these intentions in mind, it's perhaps best to characterize the American economic system as something of a mixture, or even a mixed economy. Well, it consists largely of private property ownership, freedom of contract and association, market exchange and competition, and an extensive division of labor and production. There has been a persistent, if varying, degree of government regulation, protectionism, social welfare programs and public services. This mixture of, on the one hand, market-driven systems and, on the other hand, of government intervention, I think reflects at least something of the original tensions of the early commercial republic. And that said, commerce itself, of course, has changed with scientific, technological and industrial developments which have had tremendous further effects on the republic, even perhaps on the very possibility of and for republicanism.
Speaker 2:As to the thinkers who influenced the American founders and thus the American economic system, there are many, but maybe, to name just a few of the luminaries, certainly John Locke, baron de Montesquieu, david Hume and Adam Smith. Those would be the first to come to mind Among the founders themselves. Alexander Hamilton arguably had the greatest initial impact on the American economic system, but he was certainly not without opponents or dissenters, and some of the early debates and disagreement over the role of commerce and the meaning of republicanism, and thus whether and what shape the American commercial republic should or ought to take, can be found, for example, in the writings of the federalists and the anti-Federalists, which I'd encourage all the listeners to read and reread.
Speaker 1:And we, after this podcast, will very much do a deep dive into some of those Federalist Papers was you know we did talk about Locke, and Montesquieu brought up Hume, but Adam Smith and the wealth of nations. What kind of influence did that have on the economy? Maybe that we have now?
Speaker 2:Yeah, certainly. Well, I'd be remiss if I didn't mention that, as we're celebrating the 250th anniversary of the Declaration of Independence, it also marks the 250th anniversary of Adam Smith's large economic work and inquiry into the nature and causes of the wealth of nations. And in this book I mean Smith. Two volume work, a massive work.
Speaker 2:Smith both compiled and systematized most of the existing works and knowledge of political economy, but also critiqued much of what he saw as contrary to productivity and liberty, a system known as mercantilism, and in the work he advances his own view that he referred to as the system of natural liberty. And to mention just a couple of key elements of this work, he certainly elaborated right from the outset, in a rather magisterial way, on the importance of the division of labor for the sake of productivity. He saw how the broader it extended through ever more specialization, the greater the proficiency and output would be, but also that as markets themselves extended or there was access to greater, extended markets, this would further encourage, in turn, more specialized labor and economic growth. So these things work, these things work together, and this, this insight regarding sort of you know, productivity and the possibility for wealth for nations was of course very attractive to many of the founders, and again, not least of all, alexander Hamilton.
Speaker 2:I should also add, of course, that Smith elaborated under the guise of his very famous phrase, used only well two times, possibly three, in a different context, but twice in his works, once in the Wealth of Nations and once in the Theory of Moral Sentiments this famous phrase, the invisible hand, and for our purposes here in this work, the Wealth of Nations, this metaphor really suggests that markets, the mechanism of a market, or the place and space of voluntary exchange, space of voluntary exchange, operates in an unintentional manner to direct self-interest toward the public interest or the benefit of others.
Speaker 2:And so, again, it's in contrast to this notion of mercantilism, where the suggestion was that wise statesmen ought to be directing the actions and the productivity and the labor of various members of the community and parts of the nation. Here are the ideas when, in fact, individuals step back or governments minimize this kind of top-down orchestration and control, the outputs will be all the greater, and so there's an argument here as well, of course the greater, and so there's an argument here as well, of course, that really dovetails with limited government or constitutionalism as the founders understood it as well.
Speaker 1:Dr Shelley, that was the most efficient explanation of our economy and Adam Smith's Wealth of Nations. Thank you so much for your time and your expertise and we definitely hope to have you on again.
Speaker 2:All right, well, thank you.
Speaker 1:That was perfect, that literally. Yes, thank you.
Speaker 2:Oh, sure, yeah.
Speaker 1:No, that was exactly.
