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In a letter to James Madison, Thomas Jefferson, discussing the recently-enacted Constitution, wrote of many things he liked about it, then added,

I will now add what I do not like. First the omission of a bill of rights providing clearly & without the aid of sophisms for freedom of religion, freedom of the press, protection against standing armies, restriction against monopolies, the eternal & unremitting force of the habeas corpus laws, and trials by jury in all matters of fact triable by the laws of the land & not by the law of Nations.

These points he raises look very familiar today: freedom of religion and of the press (1st amendment), protection against standing armies (3rd amendment, sort of), habeas corpus held inviolate (already in Article I, Section 9 of the Constitution; presumably he is taking issue here with the exception for "Cases of Rebellion or Invasion"?), and the right to a jury trial (7th and 8th amendments).

And then there's the odd one out, the "restriction against monopolies." That's not in the Bill of Rights.

In Madison's reply letter, he agrees with Jefferson's anti-monopolistic sentiment, making a limited, nuanced exception only for what we call copyrights and patents today:

With regard to Monopolies they are justly classed among the greatest nusances [sic] in Government. But is it clear that as encouragements to literary works and ingenious discoveries, they are not too valuable to be wholly renounced? Would it not suffice to reserve in all cases a right to the public to abolish the privilege at a price to be specified in the grant of it? Is there not also infinitely less danger of this abuse in our Governments than in most others?

James Madison was the drafter of the Bill of Rights, and he largely agreed with Jefferson on the subject of "restriction against monopolies," and yet this subject did not make it into the Bill of Rights. It was not even in the draft version, which contained some amendments that weren't ratified. And so it wasn't for another century, until the Sherman Antitrust Act of 1890, that the USA got legal protection against monopolies.

What went missing? Do we have any records showing how this idea out of Jefferson's proposal got dropped from the Bill of Rights, even though its author agreed with it?

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    Technically copyright was considered (and is) a kind of government-granted monopoly (on copying specific works), and the constitution was written specifically to limit the granting and use of them.
    – T.E.D.
    Commented Jan 30 at 14:48
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    @MCW - Reading through that paper, it appears that they were exactly thinking about government-granted monopolies, specifically including copyright. So this is not talking about monopolies in the usual modern sense of business with large barriers to entry (either natural, or self-built)
    – T.E.D.
    Commented Jan 30 at 19:03
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    @T.E.D.: That makes sense, Quite a bit of the US Constitution seems to have been shaped by the unfettered use of the English monarch's power in the previous couple of centuries. Trade monopolies in particular goods, such as sweet wines were used to reward royal favourites with tax money, which was a distortion of trade. Commented Jan 30 at 19:37
  • @MCW - I'm quite certain you're right. My understanding is that Locke was the state-of-the-art at the time, and his thinking was indeed mostly about government-granted monopolies, which were in fact A Thing in his time. Most of these concepts I believe had to wait for Keynseian Economics, and Keynes's birth day was still a century and a half in the future.
    – T.E.D.
    Commented Jan 30 at 19:42

1 Answer 1

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Cool question;

Short answer

All of these proposed antimonopoly amendments to the Constitution came from the state ratifying conventions, but since the task of writing the federal Bill of Rights in response to the requests for amendments from the states fell to newly elected Congressman James Madison, an anti-monopoly clause was omitted from the federal Bill of Rights. Madison was stubborn, persistent, and successful in keeping an anti-monopoly clause out of the Founders Constitution! Monopolies and the Constitution

Madison argued that:

Is there not also infinity less danger in this abuse in our Governments than in most others? Monopolies are sacrifices of the many to the few. Where the power is in the few it is natural for them to sacrifice the many to their own partialities and corruptions. Where the power as with us is in the many not in the few the danger cannot be very great that the few will be thus favored. It is much more to be dreaded that the few will be unnecessarily sacrificed to the many.131 IBID

Contextual answer

This is a complex topic and the short answer doesn't really explain the complexity.

What is a monopoly?

The term "monopoly" was understood at the time rather differently than it is today. Today we perceive "monopoly" as a set of commercial anti-competitive practices by commercial institutions. The Founders perceived monopoly as a government regulation enfranchising one institution at the expense of the public, for which there is an implicit quid pro quo. Such monopolies generate political patronage and shore up executive power. 2 The founders wanted to avoid government granted monopolies such as the British East India Company1. (of course we won't examine their hypocrisy w/r/t land).

Monopolies and the Constitution: A History of Crony Capitalism uses the modern term "crony capitalism"

This article explores the right of the people to be free from government granted monopolies or from what we would today call “Crony Capitalism.” . . . We begin with Darcy v. Allen (also known as the Case of Monopolies decided in 1603) and the Statute of Monopolies of 1624, both of which prohibited English Kings and Queens from granting monopolies. We then show how the American colonists relied on English rights to be free from government granted monopolies during the Revolutionary War period as, for example, when American colonists protested against the East India Company’s trade monopoly by holding the Boston Tea Party. We show that hatred of trade monopolies led in part to the American Revolution

Before and during the period of the classical economics (roughly 1776 to 1850), most people believed that this process of monopolies being eroded by new competitors was pervasive. The only monopolies that could persist, they thought, were those that got the government to exclude rivals. econlib

Monopolies and Patents: A Study of the History and Future of the Patent Monopoly refers to government granted monopolies, where the barrier to entry is the power of the state.

The language in the constitution is clearly designed to protect and nurture creators, not large institutions. Monopolies and the Constitution addresses this in a long, difficult to summarize section. The brief summary is that all of the objections referred to monopolies granted to "companies" and the final language, plus the drafts refer to "creators"

and later,

While today the word “monopoly” is generally used to refer to the private accumulation of economic power, this is not the meaning that was originally attached to the term. The original meaning of the word “monopoly” was an exclusive grant of power from the government—in the form of a “license” or “patent”—to work in a particular trade or to sell a specific good. IBID

But to fully confirm the hypothesis I'd need to locate when the legal concept of monopoly broadened from crony capitalism to barriers to entry and shifted from a government license to extralegal anti-competitive practices. And this doesn't answer the core question why protection against monopoly was omitted from the Bill of Rights.

(I'll have to do more research & develop this) I need to explore why Jefferson/Madison differed from the general consensus.

It would appear that there was no need for monopoly protection - other than the government's power to protect the monopolies it created.

Of course, no ban on monopolies made its way into the federal constitution or Bill of Rights. This is probably in large part due to Madison’s view that representational government at the federal level would prevent a repeat of the English experience with monopolies:

This question is so intriguing that I'll continue to research and update. My apologies if interim revisions undermine the organization, flow or clarity.

Open research questions

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Was monopoly in the 17 originally proposed?. The original input to the what would be the bill of rights was scores, if not hundreds. When in the process of rewriting did monopoly protection vanish?

When were commercial monopolies and barriers to entry first articulated?

scholarlycommonslaw.nortwestern.edu may be useful


1 Beyond the scope of this answer, but if you read this history of British East India Company (BEIC), and Parliament, this becomes much more plausible. BEIC was a huge problem for Parliament and it is quite plausible that the founders didn't want to follow that precedent

2 It might be interesting to examine how successful they were. Jefferson's National Gazette and Phillip Freneau are pretty clear examples of one of the kinds of political patronage they were trying to suppress - a man who didn't speak French paid to translate French, spending his time on non-governmental political activity. Teapot dome, etc. It is possible that political patronage is an intrinsic part of government, and the only option is to slightly raise the cost and diffuse the benefit.

Van Buren managed to create the patronage networks that continue to dominate American politics.

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    I think you're quite right. Their experience in England was that the monarch used legal monopolies, like copyright, as a tool to provide a stable income to their favorites (allowing them the leisure to hang with said monarch). One of the things you may notice about the Constitutional provision for copyright is that they made it crystal clear that granting one is the province only of Congress, not the executive.
    – T.E.D.
    Commented Jan 30 at 19:49
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    A good and deep answer. And Madison was right, BTW. It seems the question author thinks that any monopoly is bad. But every patent or author right is a monopoly. Without such monopolies, there would be no Edisson, for example.
    – Gangnus
    Commented Feb 7 at 20:11

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