On June 30, Paul Atkins, president of the Securities and Exchange Commission, stood earlier the Economic Club of New York and delivered a history lesson. With the nation’s 250th day days away, Mr. Atkins told his assemblage that the Declaration of Independence and Adam Smith’s “Wealth of Nations,” some products of 1776, remainder connected “the aforesaid conviction: spot the individual, not the institution.” America’s founding documents, he said, “in galore respects, bespeak Smith’s cardinal themes,” and the founders, wary of concentrated powerfulness “whether lodged successful a crown, successful a parliament, aliases successful a bureaucracy,” built astir liberty a governing model “as ray arsenic prudence would permit.”
The problem is that Mr. Atkins turns the coincidence of 1776 into kinship, and kinship into influence. He past conscripts that invented founding into a deregulatory agenda, capped by a wholesale retreat from cryptocurrency enforcement, that America’s founders would person recognized arsenic a corruption of statement government.
Start pinch the Declaration. Mr. Atkins’s astir actual grounds is Jefferson’s well-worn transcript of “The Wealth of Nations.” But the Monticello source cited successful his ain footnote reports that Jefferson acquired the book while serving successful France betwixt 1784 and 1789, astatine slightest 8 years aft he drafted the Declaration. Jefferson whitethorn person encountered Smith’s ideas earlier 1776, but location is nary grounds that “The Wealth of Nations” shaped the Declaration. On the contrary, Jefferson told James Madison successful 1823 that he “turned to neither book nor pamphlet” while penning it. Asked by Henry Lee successful 1825 astir its sources, he described the Declaration arsenic “an look of the American mind,” reflecting the “harmonising sentiments of the day” embodied successful “the simple books of nationalist right, arsenic Aristotle, Cicero, Locke, Sidney, etc.”
By fusing America’s founding to “The Wealth of Nations,” Mr. Atkins turns Smith’s defense of free markets into a justification for weakening nationalist oversight of politically favored financial interests. Notice that Atkins’ catalog of dangers includes crowns, parliaments and bureaucracies, but omits the economical factions the founders besides recognized arsenic imaginable threats to statement government. James Madison warned successful Federalist No. 10 that “the astir communal and durable root of factions has been the various and unequal distribution of property,” specifically identifying the landed, manufacturing, mercantile and moneyed interests. Jefferson made the constituent moreover much explicitly. Writing successful 1816, he called for the federation to “crush successful its commencement the aristocracy of our monied corporations, which situation already to situation our authorities to a proceedings of spot and bid defiance to the laws of our country.”
The founders weighted backstage spot and encouraged commerce. But they besides recognized a basal statement rule that Mr. Atkins ignores: powerfulness tin frighten liberty whether it is wielded by the authorities aliases by backstage interests able capable to crook the authorities to their will.
That missing half of the founding contented becomes intolerable to disregard erstwhile Mr. Atkins turns to cryptocurrency. He boasted that the S.E.C. is answering President Trump’s telephone “to make America the Crypto Capital of the World.” In practice, that has meant dismissing, aliases settling connected favorable position for the defendant, the majority of outstanding cryptocurrency enforcement actions, respective of them involving defendants pinch business ties to the president aliases his family.
The crypto manufacture helped underwrite the governmental conditions for this solicitude. It was the apical firm donor successful the 2024 predetermination rhythm and has already amassed a nine-figure run arsenal for the coming midterms. And the president is personally invested successful the outcome. His ain financial disclosure reports that he earned much than $1.4 cardinal successful income from his family’s crypto ventures successful 2025.
Mr. Atkins’s crypto schedule is difficult to reconcile pinch his tribute to Adam Smith, because Smith did not respect money and banking arsenic a realm beyond nationalist law. He welcomed privately issued slope notes redeemable successful golden aliases silver, recognizing them arsenic an businesslike intends of facilitating commerce. But erstwhile Scottish banks issued small-denomination notes whose nonaccomplishment would autumn hardest connected mediocre laborers, Smith endorsed restricting them, conceding that the norm violated “natural liberty” but defending it arsenic “exactly of the aforesaid kind” arsenic requiring statement walls to extremity the dispersed of fire.
The Constitution reflects a akin instinct. Having witnessed the insubstantial rate issued by the Continental Congress depreciate into worthlessness, the Framers vested authority complete the nation’s monetary strategy successful Congress, giving it the powerfulness to “coin Money” and “regulate the Value thereof,” while forbidding the states to coin money, rumor bills of in installments aliases make thing but golden and metallic ineligible tender. They did not prohibit backstage slope notes, but they made clear that establishing the nation’s monetary model was a nationalist responsibility. In different ways, Smith and the Framers reached the aforesaid conclusion: backstage monetary invention has a place, but it must stay taxable to nationalist law. Mr. Atkins’s crypto schedule is difficult to reconcile pinch that principle.
Mr. Atkins closed pinch a informing astir socialism, successful an unmistakable changeable astatine Mayor Zohran Mamdani and different New York leaders who, he said, “are opening to speak the connection of power alternatively than of freedom.” He moreover quoted President Trump’s informing that nether communism “great unit proceeds astatine levels ne'er seen before.” But those warnings ringing hollow coming from an management that has many times intervened successful backstage markets, including by taking ownership stakes successful backstage companies, while extending preferential treatment to politically connected firms. A informing astir governmental unit likewise loses its unit erstwhile its cited authority incited a mob to halt the serene transportation of powerfulness and past pardoned participants who hit constabulary officers.
If Mr. Atkins is looking for a instruction astir socialism, he mightiness statesman pinch the history of the agency he leads. American communism attracted its largest organized pursuing during the Great Depression, aft a banal marketplace rife pinch fraud and manipulation, and lacking broad national oversight, collapsed and helped resistance the system down pinch it. Congress responded pinch the Securities Act of 1933 and the Securities Exchange Act of 1934, creating the S.E.C. Critics denounced the authorities arsenic socialism. Congressman Fred Britten complained that “the existent object” of the 1934 rule “is to Russianize everything.” But the republic survived and American superior markets went connected to finance the American period nether the very rules Mr. Atkins now portrays arsenic shackles.
Mr. Atkins wants the founders to bless a world successful which nationalist powerfulness retreats and backstage financial powerfulness is presumed innocent. The existent founding will not cooperate. Jefferson feared a monied aristocracy, Madison feared faction, and Smith accepted restraints connected banking erstwhile backstage liberty endangered society.
The S.E.C. was created to reconstruct assurance successful financial markets aft their illness had helped make socialism politically attractive. Well-regulated markets nutrient trust. Trust attracts investment, and broadly shared prosperity remains among the strongest defenses against governmental extremism. Markets clasp their legitimacy only erstwhile the nationalist believes the rules use arsenic to everyone. An S.E.C. president who retreats from enforcing the securities laws against a politically connected manufacture tells mean Americans that wealthiness and power acquisition different rules. Once that belief takes hold, assurance successful markets erodes, and critics of capitalism scarcely request to make their ain case.
Lee Reiners is simply a lecturing chap astatine Duke University
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