The one individual most responsible for the development of the American economy was Chief Justice John Marshall.

Sept. 25 would have been his 206th birthday, and Sept. 17 started Constitution Week. In his award-winning book, Marshall University Professor Jean Smith characterized Marshall as the "Definer of a Nation."

Marshall was the fourth and longest serving (1801-1835) chief justice of the Supreme Court. His tenure spanned six presidents. Some see Marshall's greatest contribution as establishing the Supreme Court as a separate and equal player with the Congress and president in the system of checks and balances. While correct, this view is too narrow and diminishes his contributions to the development of our market capitalist system.

In 1803, writing for the Court's majority (which he usually did) in the case of Marbury v. Madison, he ruled an act of Congress unconstitutional and established the doctrine of "judicial review." This doctrine, which was later extended to state legislation and decisions of state courts -- Martin v. Hunter's Lessee (1816) and Cohens v. Virginia (1821) -- significantly increased the role the Supreme Court. The doctrine continues to play a major role in tipping the balance of power between the federal government and the states in favor of the former.

The decision so rankled the advocates of states' rights that it led to a permanent rift with some founding fathers, including Thomas Jefferson. Jefferson's view of the nation as semi-autonomous states based on a yeoman agricultural society contrasted sharply with Marshall's. The chief justice feared local and regional interests would destroy the unity of the new and fragile nation and create a nation fractured into small and inefficient economies.

Marshall's philosophy was never more evident than in the case of McCulloch v. Maryland (1819), where the Supreme Court found Maryland's tax on the Bank of the United States to be illegal. The oft-quoted words "the power to tax involves the power to destroy" were first coined in this decision. Maryland had contended that the U.S. Constitution nowhere provided for the federal government to establish a national bank. Using the "necessary and proper clause" of the Constitution, Marshall asserted that Congress' authority to do anything needed to exercise its enumerated powers.

This decision greatly expanded the scope of federal action. It established the doctrine of "implied powers," which subsequent Supreme Courts have used repeatedly to validate legislation for which there is no specific constitutional provision. Further, this case continued to establish federal supremacy over the states by noting, "The Constitution and the laws made in pursuance thereof are supreme."

A further demonstration of national government dominance was the case of Gibbons v. Ogden (1824). Marshall set aside a New York law giving a monopoly on a water route between that state and New Jersey. According to the opinion of the court, this law violated the "interstate commerce" clause of the Constitution. The court also took the opportunity to expand upon the definition of "commerce." While Ogden contended since his boats hauled only passengers, they were not in "commerce." Marshall found "commerce" to include not only the exchange of products but any form of commercial intercourse. Seizing upon this definition, future Supreme Courts have continued to expand the term, and it serves as the legal underpinning for most governmental regulation.

From both a legal and economic standpoint, Marshall's opinion in the Dartmouth College Case (1819) is significant. The court strongly affirmed the contract clause of the Constitution prohibiting a state from making "any law impairing the obligation of contract." The attempt of New Hampshire to revoke Dartmouth's private charter was invalidated. This case followed a similar opinion in Fletcher v. Peck (1810) overruling a state legislature's action invalidating a land contract. These decisions and their expansion by opinions of subsequent Supreme Courts limited the government's ability to interfere with private contracts, including those of business corporations.

How can Marshall's legacy as "definer" of America's market capitalist economy be evaluated? Economists agree the creation of a large common market rather than one of small competing state markets was a major factor in the expansion of the American economy. While there is no evidence in his writings that Marshall had read Adam Smith, he affirmed Smith's dictum that "the size of the market limits the nation's prosperity." Had Jefferson prevailed, it is difficult to say what shape today's economy would take, but it is fair to conclude that it would not be nearly as robust.

His strong support of the contract clause opened the way for the development of American industry. No other nation provided the same degree of protection to agreements reached in a free market. The extension of the right of contract to corporations made possible the formation of today's business entities by extending the rights of "natural citizens" to "artificial" ones.

While Supreme Courts in the past half century have somewhat undercut private contract rights, the doctrine has continued to facilitate the American economy. The doctrine has been emulated by governments across the globe with the goal of a better material life for their citizens.

Critics point to the decisions of Marshall as having begun the growth of federal regulation, which now touches (interferes?) all aspects of the American economy. Using the "interstate commerce clause" in conjunction with the "necessary and proper clause," almost any governmental action can be justified. By finding "implied powers" in the Constitution, Marshall's "activist" judicial heirs have been able to capture under the "penumbra" of the Constitution all manner of expansions of government power.

Marshall's name would not appear on a list of great American economists. That would be a serious omission. Those of us who enjoy the world's highest standard of living owe him a debt of gratitude. He not only "defined the nation" but ensured its prosperity.

Cal Kent is vice president of business and economic research at Marshall University.