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On October 15, 1774, the ship Peggy Stewart owned by the Annapolis mercantile company of Dick and Stewart sailed into the harbor of Annapolis in the colony of Maryland, carrying with it a cargo of tea. On arriving, the ship’s owner paid the tax, then applied by Britain to importations of tea to its American colonies in accordance with the Tea Act of May 1773.

This law was intended to avert bankruptcy of the East India Company, which had lobbied the British Parliament to exempt it from the tea import duties that its colonial competitors were required to pay. As if this was not enough, the company was also granted the privilege of being allowed to ship its tea directly to agents in America instead of placing its tea on open auction in Britain. The company was thus able to undercut American merchants, who were required to purchase tea by the regular process of passing through the higher-taxed British controls.

The political point of this exercise was to elicit the American colonists’ implicit agreement to the British Parliament’s right to tax the American colonies. This at least was how it was understood by those American colonists, who were increasingly incensed at what they regarded as a pattern of repression against His Majesty’s subjects in British North America.

Opposition to what many Americans viewed as the British government’s latest arbitrary act was especially fierce in Maryland. Few were more outspoken in their opposition than one of its leading public figures, Charles Carroll of Carrollton. “It will not do,” Carroll insisted, “to export the tea to Europe or the West Indies. Its importation is an offense for which the people will not be so easily satisfied.”

Carroll was no man of violence. He was disconcerted by some of the Boston Tea Party’s radical undertones. Carroll also worried about the potential for anarchy that is part of any revolution. Such qualms didn’t, however, prevent Carroll from proposing that the Peggy Stewart’s owner, Anthony Stewart, make amends by burning not just the tea but also his ship!

Free Markets, Free Churches, Free Men

Today, Charles Carroll is primarily remembered as the only Catholic to sign the Declaration of Independence. Rather fewer people know that Carroll was also a strong believer in economic freedom — and not merely because he recognized all the economic problems associated with what Adam Smith called “the mercantile system” that dominated Europe from the 1500s until the end of the eighteenth century. Carroll’s commitment to economic liberty was also, in all likelihood, influenced by the moral teachings of his faith.

Charles Carroll always stood out among the American colonists in his opposition to import and export duties imposed by the British Parliament. Indeed Carroll thought the American colonies should never have agreed in the first place to Britain imposing any duties on American merchants. This position was not common among Carroll’s contemporaries in the 1760s.

As a close student of European politics, however, Carroll understood that Britain’s policies in this area owed much to the efforts of Britain’s prime minister, William Pitt, to curry favor with British merchants, many of whom exerted enormous influence upon British political life. British merchants, as Carroll well knew from his years spent living in France and England, feared competition from America. It threatened the comfortable niches that they maintained through closeness to those in power rather than hard work and competition in the marketplace.

But Carroll also insisted that British regulation of the colonies’ commerce was yet another form of taxation imposed upon Americans without their consent. Though Britain repealed the Stamp Act in March 1766, Carroll was among the first to point out that the Declaratory Act of 1766 that accompanied the Stamp Act’s repeal provided the legal basis for the ongoing restrictions on commerce within, between, and outside the American colonies.

Carroll’s ultimate objective was to break mercantilist policies and replace them with free trade. On a domestic level, Carroll worked strenuously to eliminate tolls within Maryland’s jurisdiction and sought to make the border riverways free to travelers and merchants.

Carroll was not afraid, however, to invoke the claims of justice in his efforts to overturn what he considered impositions upon American colonists. He saw no reason why he or anyone else should be forced by law to trade many of his goods with English merchants alone. Nor did Carroll think it fair that anyone should be forced to forgo their comparative advantage in the marketplace because of mercantilist policies. “If,” Carroll wrote in 1766, “I could make a coat of my own wool, much better and cheaper than what I could have from England, would it not be the highest injustice to force me to forego such an advantage: would it not be raising a very heavy tax upon my property without my consent?”

Such policies amounted, Carroll patiently explained to the less-economically informed Benjamin Franklin, to nothing less than price controls — something that he regarded as “destructive of that freedom in dealing which is the life and soul of trade.”

“Every regulation of price,” Carroll wrote, “is an acknowledgement that the price allowed is not equal to the value of the commodity on which it is fixed.” The only place, Carroll insisted, in which the value could be fairly established was in a marketplace characterized by truly free exchange.

The Thomistic Case for Free Trade and Sound Money

So what has Carroll’s Catholicism have to do with this? It is very likely that much of Carroll’s thinking about these matters was shaped by his studies at the Jesuit College of Saint Omers in Flanders, the Jesuit college in Rheims, and the Collège Louis-le-Grand in Paris. During his many years of study in France and England, Carroll was exposed to classical minds such as Cicero, Virgil, and Horace; Roman and French civil law; English common law; and Enlightenment thinkers (Montesquieu in particular). But as part of the Ratio Studiorum curriculum followed by Jesuit schools at the time, the most formative influences impressed upon Carroll’s mind would have been Thomistic thinkers.

Among other things, that means Carroll would have learned that the normal measure of the value of an economic good was the price it would be fetch, in Aquinas’s words, “in the market” (secundum communem forum). He would also have been taught that sixteenth-century scholastic thinkers such as Francisco de Vitoria, O.P., regarded free trade as a “right.”

Interestingly, Vitoria developed this argument in the context of claiming that the native peoples of the New World (a point that would have not escaped Carroll’s attention) should not be prevented from engaging in free exchanges with European merchants by either their indigenous rulers or European kings. Natural justice, Vitoria stated, required rulers to allow people to enter their lands in order to trade. Such were Vitoria’s convictions against mercantilist policies that he described laws unduly limiting free trade between nations, or which sought to exclude well-intentioned strangers from trading, as “iniquitous and against charity.”

But scholastic thinkers were also very firm on another matter dear to Carroll’s heart and that of past and present advocates of free markets: monetary stability. They were among the first to identify as unjust the tendency of governments to manipulate currencies for self-interested reasons or to benefit particular groups.

In the fourteenth century, for example, Bishop Nicole Oresme of Lisieux (1320–1382) assailed the widespread practice of currency debasement among European monarchs of the time in his Tractatus de origine, Natura, Jure et Mutationibus Monetarum (1355). The king, he insisted, did not “own” the kingdom’s money. Rather he was its custodian. Hence the crown’s responsibility was to maintain the stability of the currency’s value. In the early seventeenth century, the Spanish theologian Juan de Mariana, S.J., wrote a long treatise, De monetae mutatione, which severely criticized those governments that depreciated currencies in pursuit of dubious ends.

In 1777, Charles Carroll had the distinction of being the only member of the new Maryland Senate to vote against a legal tender law that allowed Marylanders to pay their debts in fiat paper money issued by either the Continental Congress or Maryland. The crux of Carroll’s argument was as much moral as economic. Such a law (which he described as “a most infamous action”) meant, Carroll maintained, that the government was effectively allowing debtors who had been lent money in pounds-sterling to repay their loan in a paper currency that, thanks to wartime inflation, was becoming worth less and less by the day. This meant no current debtor would have to repay the full real value of what they owed.

Alongside this basic injustice, Carroll observed such measures meant that creditors would be less trusting in the future, thereby limiting access to credit for those who needed and merited it. It also opened the door to what Carroll called “the secret workings and devices of the avaricious and the artful.” By this, he seemed to have had in mind, not only less-than-scrupulous debtors, but also governments. Carroll was especially scathing in his criticisms of the monetary ideas of the Scottish-French financier John Law, whose attempt to solve the French government’s fiscal imbalances by indulging in the wholesale issue of paper money eventually produced a financial bubble and the crash of France’s Banque Générale in 1720.

As Carroll predicted, many debtors in Maryland did in fact use the legal tender law to avoid paying back the full amount of what they owed their creditors. The same law also contributed to rampant inflation in Maryland, as well as the wider inflation that gradually took hold of the 13 colonies throughout the Revolutionary War. Carroll and others were able to have the law repealed in December 1780. By then, however, considerable damage had been done.

Given America’s contemporary addiction to easy money, it is worth recalling Carroll’s warnings about loose monetary policy. Yet perhaps the most important lesson that Americans can draw from Charles Carroll’s economic thinking today is a reminder that the moral case for economic freedom didn’t emerge ex nihilo in the various Enlightenments. It was already part and parcel of significant currents of Western thought that long precede the world of John Locke. That’s not to downplay the influence of Enlightenment ideas upon the modern case for markets, not to mention the American Revolution. It does, however, underscore that moral arguments for free markets need not be — not least because they never were — the exclusive preserve of a post-Enlightenment world.

This article first appeared in the Intercollegiate Review, published by the Intercollegiate Studies Institute.

Dr. Samuel Gregg is director of research at the Acton Institute. He has written and spoken extensively on questions of political economy, economic history, ethics in finance, and natural law theory. He has an MA in political philosophy from the University of Melbourne, and a Doctor of Philosophy degree in moral philosophy and political economy from the University of Oxford, where he worked under the supervision of Professor John Finnis.