UTION AND GOVERNMENTAL SYSTEMWithin the framework of democratic capitalism, the American Constitution and government structure have a fundamentally liberal backbone. Viewed as a social contract, the relationship between the state and the individual is expressed in the Constitution which dictates the liberal values intrinsically woven into American history. Combined with the Bill of Rights, the Constitution holds the representative government accountable for its actions and sets finite limits on the power it wields over the individual. A capitalist society such as that of the United States uses taxation and wealth distribution as a tool for controlling social equality, an unavoidable hypocrisy of liberal values in a democratic welfare state. Classical liberal values that hold the individual’s rights as paramount have been modernised to accommodate a mildly paternalistic social welfare system.
Classical liberalism suggests that the state and society can be viewed as an immense social contract. In a liberal democratic country such as America, the constitution is the fundamental part of that social contract; it is a contract between the state and the civil society. The American constitution is a guide to legislation and its interpretation. An essentially liberal contract, the constitution binds not only the government, but also the people. Through the constitution, the people collectively commit to certain institutional procedures for managing public affairs and resolving social conflicts. The constitution not only limits the arbitrary power of the government, it also prevents public administration from being poisoned by people’s short-term tempers and passions. Through the constitution, the people collectively commit to certain checks against those capricious human sentiments.
A central liberal principle which the American constitution serves, is to limit and separate governmental power. The classically liberal distrust of majoritarian tyranny has continued into present-day American politics through its role in the Constitution. In a liberal constitutional system, there is an important difference between the constitution and ordinary laws. While ordinary laws can be modified or repealed to protect civil liberties by the national legislature, or be declared illegal or unconstitutional by the process of judicial review (Burns et al, 1993, p.21), the national legislature usually has no unilateral power to modify or repeal the constitution, and the judiciary has no power to declare the constitution illegal. For example, in the United States, the constitution can only be modified after the legislatures (or constitutional conventions) of two-thirds of the states approve, or by a two-thirds vote of both houses of Congress, followed by ratification from three-quarters of the states or their ratification conventions (Burns et al, 1993, p.34). The federal legislature alone cannot amend the American Constitution. Thus, the Constitution is framed in a way to protect it from amendment by unilateral acts of government, as such amendments could infringe the civil liberties of the people. Such a fear of powerful government is Classically liberal, the view that the people need be protected from their government by limiting and separating its powers; Quis custodiet ipsos custodes – who guards the guards?
The liberal preoccupation with individual rights is predominantly portrayed in American political culture through the Bill of Rights. Its liberal purpose of guaranteeing individual liberties such as freedom of speech and freedom of religion dictates the universal rights of all citizens. The purpose of The Bill of Rights is to protect citizens from abuse of power that may be committed by the different areas of their government. It does this by expressing clear restrictions on the three branches of government laid out previously in the Constitution. As stated by Hugo Black, Associate Justice to the Supreme Court, the Bill of Rights protects people by clearly stating what government cannot do, by detailing the procedures that government must follow when bringing its powers to bear against any person with a view to depriving him of his life, liberty, or property (Black, 1960). The First Amendment to the Constitution dictates that Congress shall make no law which establishes a national religion, prohibits free speech or press, or which prevents the right to assemble or petition the government (Black, 1960). In the language used, it expressly prohibits the legislative branch from making laws which would impose on the rights that were given to the people. Essential to maintaining individual liberty in America, the Bill of Rights restricts government to acting under certain prescribed procedures; a liberal government representative of its citizens, accountable to them and removable by them.
Individual freedom is one of the hallmarks of liberalism, and particularly of America’s free-market economy; each individual is free to choose how they wish to put their income to use. Adam Smith, hailed as the founder of classical economics, suggested that the sum of individuals’ self-interest would produce results that corresponded to the overall good of society (Heywood, 2004, pp.337-338). Capitalism, the free market, relies on private ownership and individual initiative in the marketplace for production and distribution. In general terms, liberal principles advocate that individuals pursue their own best interests, in economic terms, and that this mutual pursuit of individual interest (the free market) encourages innovation and improvement (Greenberg, 1989, p41). In a similar fashion, free market societies are generally liberal democracies. The analogy is presented that the free market in economics is equivalent to the free market of ideas and policies that is liberal democracy. Underlying this approach to economic and political organisation is the assertion that all individuals possess certain equal rights to vote, to work, to move and that this creates a level playing-field in the free market and electoral politics.
The American federalist system of government upholds the liberal principle of representative government. Liberalism requires that rulers should be identified with the people’ (Mill,  1974, p.61) and in an American geographic and cultural context, individual representation is essential at a local, or state level. The framers of the American Constitution required that the states have much more power than the national government, and allowed the national government power only in areas that concerned the nation as a whole. By limiting the national government’s power in this way, the drafters/founding fathers felt that they had ensured the sovereignty of the individual states (Heywood, 2004, p.94). Individual interests are better represented by a state government than they would be by national government.
The graded taxation and social welfare systems in the Unites States are, in theory, expressions of modern liberalism; social, legal and political equality are at the heart of liberal philosophy. Like the Australian system, wealthier Americans are taxed at a higher level than their less wealthy counterparts. This is justified by the liberal principle of equality; all people are born’ equal’ (Heywood, 1993, p.113). In American society, social equality is a compromise at the expense of freedom and through the penalising of talent’ (Heywood, 1993, p.113) in that individual success brings greater taxation, greater penalties.
As levels of taxation are fluid from one American government office to the next, considerable social control is exercised. Gradations in taxes can have the effect of intensifying or reducing inequalities in the distribution of wealth and income’ (Heer, 1937, p.485) depending on whether a particular tax focuses on the wealthy or the poor and how the income is redistributed through a social welfare structure (Heer, 1937, p.485). Fundamentally, government in the United States is empowered to distribute wealth and control taxation levels to achieve consciously sought social objectives’ (Heer, 1937, p.484) and thus balance social equality against capitalist gain. A taxation system which aspires to principles of modern liberalism wields taxation as an instrument of social control’ (Heer, 1937, p.484) and therefore sacrifices the rights of the individual through governmentally dictated social inequality; that is the unavoidable hypocrisy found in the liberal principles of any democratic welfare system.
The United States of America is arguably the nation which has strayed least from liberal values, excluding the classically liberal European Court of Human Rights, the final court of appeal for 45 different countries. Its constitution and Bill of Rights is based on fundamental liberal principles that protect the individual’s rights while limiting the appropriate powers of government. Establishing laissez-faire market capitalism as the definitively successful economic policy, it extols the virtues of individual interests and enterprise with society benefiting as a whole. The American Constitution, the mutual contract that binds the individual to the state, effectively details the classically liberal values the Union was founded upon, to be interpreted in a contemporary context as custodian of modern liberal principles.
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Black, H. The Bill of Rights’, Reprinted from New York University Law Review, Vol. 35, April 1960.
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Greenberg, E. The Cultural Milieu: America as a Liberal Society’, The American Political System: A Radical Approach, Fifth Edition, 1989, pp.36-52.
Heer, C. Taxation as an Instrument of Social Control’, The American Journal of Sociology, Vol. 42, No. 4, January, 1937, pp. 484-492. Online (Stable URL):
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