
The United States Constitution is the supreme law of the land, establishing a federal and constitutional republic. The Constitution's principles of limited government, individual liberty, equality, and self-government have had a profound impact on the American economic system. The economic system of the United States is a capitalist or market economy, where businesses are predominantly privately owned and operated. The Constitution's influence on the economic system is evident through its protection of property rights, its establishment of a federal reserve system, and its impact on taxation and fiscal policy. The specific design of the American economic system can be attributed to the principles enshrined in the Constitution, which acts as a foundation for the nation's economic policies and practices.
| Characteristics | Values |
|---|---|
| Type of economy | Capitalist or market economy |
| Business ownership | Private individuals, partnerships, and stockholders |
| Government type | Constitutional and federal republic |
| Government structure | Federal government with limited powers, state governments with most powers |
| Powers | Separation of powers into three branches |
| Rule by | Popular consent with laws drafted by people's representatives |
| Individual rights | Freedom, equality, civil rights, and civil liberties |
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What You'll Learn

Limited government
The idea of limited government is a key feature of the US Constitution and a fundamental principle of the American economic system. Limited government is a political philosophy that restricts the power of the government. The US Constitution, as the supreme law of the land, establishes a federal government, defines its powers and structures, and protects the basic rights of all Americans.
The concept of limited government has a long history, dating back to the Magna Carta in 1215 and the Enlightenment in Europe. The term "limited government" was first used by King James VI and I in the late 16th century. The idea was further developed by Enlightenment philosophers in the 17th century, such as John Locke, who argued that the powers of the government should be restricted to only what the people allowed. Locke's four specific limitations on government power included the principles of equality before the law, the common good, no taxation without representation, and the legislature's authority.
In the American context, the Declaration of Independence, with its ideas of liberty, equality, and self-government, laid the foundation for limited government. The US Constitution, adopted in 1787, built upon these ideas by creating a constitutional and federal republic. In a federal republic, the federal government has limited powers, while state governments retain most powers. The Constitution separates power into three branches—the executive, legislative, and judicial—to ensure that no part of the government becomes too powerful.
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Separation of powers
The United States Constitution is the supreme law of the land, establishing a federal government, defining its powers and structures, and protecting the basic rights of all Americans. The Constitution also describes the division of power, outlining which specific powers are granted to the federal government, while most remain with the state governments.
The separation of powers is a key principle in the American economic system. This principle, along with the system of checks and balances, has shaped almost all of the conflicts faced by the nation, even into the present. The separation of powers has also protected democracy and civil rights when they have been threatened by individuals or groups.
The separation of powers means that the Judiciary holds all powers related to the judicial function, and the Legislative and Executive branches may not interfere. This is replicated in the governments of all the states, with governors, state legislatures, and state courts.
Many political scientists believe that separation of powers has been a decisive factor in the development of a unique political structure in the United States. For example, John W. Kingdon argued that separation of powers contributed to the development of a unique political structure in the US, and that it has led to an unusually large number of interest groups active in the country.
The system of checks and balances makes it much more difficult for any one branch of government to abuse its power. As there is more than one person running each branch, there is room for debate and discussion before decisions are made within a single branch.
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Rule by popular consent
The United States Constitution is the supreme law of the land, and it establishes a federal government, defines its powers and structures, and protects the basic rights of all Americans. The Constitution creates the form of government in the United States, which is a constitutional and federal republic. In a constitutional republic, the people select individuals to serve temporarily in political office, rather than directly governing. The constitutional aspect means that both citizens and their governing officials must follow the rules established in the Constitution.
The idea of "rule by popular consent" is also known as "consent of the governed." This is a political philosophy that asserts that a government's legitimacy and moral right to use state power is justified and lawful only when consented to by the people or society over which that political power is exercised. This theory of consent is in stark contrast to the divine right of kings and has been invoked against the legitimacy of colonialism.
The United States Declaration of Independence, a document outlining the core ideals and political philosophy of the United States, includes the idea of "the consent of the governed." The Constitution, which was created to ensure the government remained bound to its principles, begins with "We the People," further emphasizing the importance of popular consent.
The concept of consent of the governed implies that the people have the right to withdraw their consent if a government abuses its power or becomes tyrannical, arbitrary, incompetent, or unrepresentative. This idea, asserted by the British philosopher John Locke, was also included in the 1948 Universal Declaration of Human Rights, which states, "The will of the people shall be the basis of the authority of the government."
In summary, "rule by popular consent" or "consent of the governed" is a fundamental principle in the American political system. It asserts that governmental power is derived from the people and that the people have the right to choose their leaders and hold them accountable. This principle is reflected in the United States Constitution and Declaration of Independence and forms the basis for the country's system of government.
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Protection of civil rights
The United States Constitution is the supreme law of the land, and it establishes the federal government, defines its powers and structures, and protects the basic rights of all Americans. The Constitution creates the form of government in the United States, which is a constitutional and federal republic.
The Declaration of Independence and the United States Constitution are the two most important documents in the United States of America. The Declaration of Independence, created in 1776, lays out the core ideals and political philosophy of the United States. The U.S. Constitution, created in 1787, establishes practical structures and rules for the federal and state governments.
The Constitution begins with "We the People," announcing its purposes and goals, and listing the structures and protections of individual rights. The authors of the Constitution wrote the document to ensure the government remained bound to its principles and promises. The ideas of liberty, equality, limited government, and self-government from the Declaration of Independence later served as important features of the Constitution.
The Constitution protects the civil rights of all Americans, including those of racial and ethnic minorities. The Fourteenth Amendment (1868) established that every individual born or naturalized in the United States is a citizen and ensured that states may not deprive a citizen or resident of civil rights, including due process of law and equal protection. The Fifteenth Amendment (1870) granted citizenship and voting rights to freed male slaves and their male descendants.
Despite constitutional guarantees of rights, there has been a persistent struggle to secure federal protection of these rights. The civil rights movement of the 1950s and 1960s achieved important breakthroughs in equal-rights legislation for African Americans, breaking the pattern of segregated public facilities in the South. However, enforcement of civil rights laws has been uneven and incomplete, and resistance to these laws persists in domains such as healthcare, education, employment, and housing.
Civil rights laws generally protect citizens from discriminatory practices by governments, institutions, and other citizens. These laws are social determinants of health, as they can affect access to healthcare, education, income, and employment. Civil rights organizations work to expand access to education and economic opportunity for all, regardless of race or gender identity.
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Checks and balances
The concept of checks and balances was first proposed by the Greek historian, Polybius, in reference to the government of ancient Rome. It was later discussed by French philosopher, Baron de Montesquieu, who emphasised the need for a separation of powers to prevent despotism.
In the context of the American economic system, checks and balances are applied through the establishment of three branches of government: the executive, legislative, and judicial branches. Each branch holds different powers and can check the power of the other branches. For example, Congress can initiate constitutional amendments to reverse decisions of the Supreme Court, and can also override a presidential veto of legislation with a two-thirds vote.
The system of checks and balances is designed to slow down democratic change, giving people time to reflect on whether the changes being proposed are truly desirable. It helps to protect the rights of minorities from the power of majorities, preserving individual rights and preventing oppressive factions from dominating.
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Frequently asked questions
The US Constitution is the supreme law of the land, establishing the federal government, defining its powers and structures, and protecting the basic rights of all Americans.
The US Constitution establishes a constitutional and federal republic. This means that the people select representatives to serve in political office for a limited time, and both citizens and officials must follow the rules set out in the Constitution. The Constitution also separates power into three branches of government to ensure no part becomes too powerful.
The US Constitution's principles of limited government and separation of powers influence the American economic system, which is a capitalist or market economy. This means that most businesses are owned and operated by private individuals, partnerships, and stockholders rather than the government.
The Declaration of Independence, the Mayflower Compact, the Fundamental Orders of Connecticut, the Virginia Declaration of Rights, the Federalist Papers, the Iroquois Great Law of Peace, and the debates between Federalists and Anti-Federalists all influenced the US Constitution.
The US Constitution has had a profound impact on legal thinking and government models worldwide. Many former European colonies, including Latin American countries, referenced the US Constitution when developing their own freely elected governments, citing the separation of powers and individual rights and freedoms.

























