Well, Jefferson was right about economics, but he was wrong about placing too much faith in the American people as a whole.
Jefferson's "faith in the American people," though, rested on a premise, repeated in one form or another in many of his writings, and that premise is summed up in some of the following quotations directly from the man himself:
"I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power." --Thomas Jefferson to William C. Jarvis, 1820. ME 15:278He also recognized when governments did not rest on recognition of the need for an "enlightened" people.
"If Caesar had been as virtuous as he was daring and sagacious, what could he, even in the plenitude of his usurped power, have done to lead his fellow citizens into good government?... If their people indeed had been, like ourselves, enlightened, peaceable, and really free, the answer would be obvious. 'Restore independence to all your foreign conquests, relieve Italy from the government of the rabble of Rome, consult it as a nation entitled to self-government, and do its will.' But steeped in corruption, vice and venality, as the whole nation was,... what could even Cicero, Cato, Brutus have done, had it been referred to them to establish a good government for their country?... No government can continue good but under the control of the people; and their people were so demoralized and depraved as to be incapable of exercising a wholesome control. Their reformation then was to be taken up ab incunabulis. Their minds were to be informed by education what is right and what wrong; to be encouraged in habits of virtue and deterred from those of vice by the dread of punishments proportioned, indeed, but irremissible; in all cases, to follow truth as the only safe guide, and to eschew error, which bewilders us in one false consequence after another in endless succession. These are the inculcations necessary to render the people a sure basis for the structure of order and good government. But this would have been an operation of a generation or two at least, within which period would have succeeded many Neros and Commoduses, who would have quashed the whole process. I confess, then, I can neither see what Cicero, Cato and Brutus, united and uncontrolled could have devised to lead their people into good government, nor how this enigma can be solved." --Thomas Jefferson to John Adams, 1819. ME 15:233
Possessing a clear understanding of the failure of previous civilizations to achieve and sustain freedom for individuals, our forefathers discovered some timeless truths about human nature, the struggle for individual liberty, the human tendency toward abuse of power, and the means for curbing that tendency through Constitutional self-government. Jefferson's Bill For The More General Diffusion Of Knowledge For Virginia declared:
"...experience hath shewn, that even under the best forms (of government), those entrusted with power have, in time, and by slow operations, perverted it into tyranny; and it is believed that the most effectual means of preventing this would be, to illuminate...the minds of the people...to give them knowledge of those facts, which history exhibiteth. History, by apprizing them of the past, will enable them to judge of the future...it will qualify them judges of the actions and designs of men; it will enable them to know ambition under every disguise it may assume; and knowing it, to defeat its views...."