Recent Items

William Hogeland: Happy Tax Day, Alexander Hamilton!

Posted on by

By William Hogeland, the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History who blogs at http://www.williamhogeland.com. Cross posted from New Deal 2.0

Hamilton is revered for putting America on sound financial footing, but he couldn’t have done it without federal taxation.

The annual drop-dead moment when Americans must file tax returns or face unpleasant consequences has become an opportunity for the Tea Party, protesting what it sees as crippling taxation and overactive federal government, to rally its supporters. Extending this year’s filing deadline from April 15 to today, April 18, the IRS gave Tea Partiers a big weekend, and all over the country, tax-day events hymned unregulated markets, excoriated federal programs like the health-insurance reform bill, and defended anti-labor governors. Anti-Obama leaders from Sarah Palin to Donald Trump urged the faithful to oppose evils summed up for them in the annual requirement to file federal tax returns. For the Tea Party, “Tax Day” represents all that’s gone wrong with America since the founding.

So as we stand on long lines at the post office hoping to avoid the midnight axe, we might spare a moment to consider the father of federal taxes, Alexander Hamilton. Our first Secretary of the Treasury, Hamilton is celebrated by both establishment liberals and establishment conservatives: The Hamilton Project is an economic effort of the liberal Brookings Institution, and former Obama budget director Peter Orszag hung a Hamilton portrait in his office; on the right, the writer David Brooks and former Bush Treasury Secretary Henry Paulson are two of Hamilton’s biggest fans. It’s not surprising. Hamilton is rightly said to have put the new nation on sound financial footing and secured its creditworthiness. He gave us our first comprehensive national finance policy.

That policy depended on exercising certain economic powers that finance nationalists like Hamilton and his mentor the rich financier Robert Morris, as well as planter nationalists like James Madison, had been striving to achieve for the federal government throughout the 1780’s, and which came to fruition at the Constitutional convention in 1787. While Hamilton and Madison would arrive at dire odds over whether the Constitution gives the federal government the right to form a central bank (Hamilton yes, Madison no), all nationalists had long agreed that a national government, unlike a confederation of states, would have a right to tax its citizens directly, throughout the states. And unlike what they saw as state governments’ susceptibility to the American popular-finance movement’s riot and noncompliance, a national government, nationalists hoped, would have both the will and the police resources to enforce and collect taxes.

So whereas Tea Partiers sometimes associate their objections to federal taxes with a desire to “get back to the Constitution,” federal taxation is one of the Constitution’s central purposes. And we can thank the wunderkind Alexander Hamilton for proposing the legislation by which the first U.S. Congress imposed the first federal tax ever on an American product.

Hamilton wasn’t messing around. Empowered by the new government to do what he and Morris had long been frustrated in trying to do, the young, charismatic, brilliant, diligent Secretary worked up a full-blown plan for connecting national wealth, and even more importantly national credit, to ambitious national aims. Like Morris, though to a far more sophisticated degree, Hamilton wanted the United States to become an economic powerhouse and financial empire to compete with England. And he’d been tireless in figuring out how to do it.

The key, as Morris had always suggested, was to combine a big public debt with vigorously enforced taxes earmarked for funding that debt. That is: sell U.S. bonds to the small, rich merchant lending class and, as Morris had put it, “open the purses of the people,” collecting taxes from the American people, in metal, not paper, and earmarking revenues for paying the bondholders their 6% interest in hard, cold cash — 6% untaxed interest, that is. Federal power would thus shift national wealth upward and consolidate it. Yoking national credit to national interest, government would serve as an economic pivot between the creditors and the people and thus be in a position to finance roads, canals, wars, and other national projects.

Morris had fought hard during the confederation period for a simple federal tariff on imports, known as an “impost,” and opposition even to that measure had always been stiff: states wanted to retain their sovereign power to tax. But he’d also schooled his supporters in what a real federal tax slate would look like. Once people had become inured to paying a federal tariff, Morris had predicted, the federal government would be able to impose taxes on domestic products too, taxes known as “excises.” Continuing to expand tariffs alone would hit too hard the very people Morris and Hamilton wanted to encourage: the merchant financiers, who also engaged in international trade (that’s where they got the gold). Fully consolidating wealth, and fully connecting it to high national aims, meant collecting revenue for finding bonds from people who would never own a bond. Hence the importance, to Hamilton, of imposing domestic taxes.

And Hamilton pulled his whole plan off, pretty much on his own. He is often portrayed as having faced down and tamed a huge public debt that had been run up, somehow, to unfortunate proportions during the war and now needed to be paid off. Nothing could be farther from how Hamilton himself saw the situation. Swelling the public debt had been a project of his and Morris’s for many years — for all the cogent reasons of national credit described above — and now as Secretary, his plan was hardly to pay the debt down (many of his biographers to the contrary) but to fund it. Which as those of us with credit cards know, is another thing altogether.

In that context, Hamilton further persuaded Congress to assume all the states’ debts in the national one, swelling the public debt to the nth degree at last and placing it all in federal hands. That took a tough political fight. Hamilton won it in part because his Madisonian opponents were nowhere near as finance-savvy as he, and partly because empowering the federal government to enact a top-down national finance plan had all along been a chief purpose of the Constitution under which Hamilton acted.

So state debts were nationalized, and a law for funding the domestic public debt was passed. Hamilton couldn’t get his bondholders their full 6%, but they were happy enough. Investing in the U.S. looked safe and lucrative.

Funding and assumption: those were Hamilton’s great twin achievements, and they did secure the credit of the nation in just the way he and Morris had always wanted. But they depended on a third leg of the finance program, rarely discussed but utterly essential: federal taxation of the American people, with a full-fledged collection service, inexorably spreading federal power to collect, audit, and prosecute throughout the country, from state to state, town to town, and village to village. To Hamilton, taxes weren’t an unfortunate necessity. They created a nation, pulling the country together through a network of federal officers opening offices and banging on doors. Running every last detail of that widespread, growing, and powerful federal agency, Hamilton came into his own.

Print Friendly
Twitter11DiggReddit0StumbleUpon0Facebook6LinkedIn1Google+0bufferEmail

52 comments

  1. MyLessThanPrimeBeef

    I feel the Tea Party could probably best use their energy building a museum for victims of taxation worldwide.

    They can call it Victims of Taxation Musuem.

    1. MyLessThanPrimeBeef

      I wonder if the Tea Party will ask the Congress to issue an apology for American taxation victims and being a sovereign nation, where the MMT Treasury can issue new debt to cover old debt payments, the government will give each US victim a $1,000,000 compensation check.

      1. F. Beard

        I wonder if the Tea Party will ask the Congress to issue an apology for American taxation victims and being a sovereign nation, where the MMT Treasury can issue new debt to cover old debt payments, the government will give each US victim a $1,000,000 compensation check. MyLessThanPrimeBeef

        Those compensation checks would pay off a lot of illegitimate debt to the government enforced counterfeiting cartel, the banking system.

    2. alex

      “Victims of Taxation Museum”

      And they’ll ask for federal funding for it. The astonishing thing though is that they’ll do so with no sense of irony.

  2. attempter

    It’s good to see Naked Capitalism exploring the hijack of 1787-88 with these Hoagland posts.

    There’s nothing new about the incoherency of conservatives and tea party types on this subject. They all want big, aggressive government on behalf of big banks, big corporations, the super-rich. As the post demonstrates, this was the basic principle underlying the very existence of the federal government as constituted in 1788 right from the start.

    There were certainly alternatives which could have knitted together a domestically strong America, but these wouldn’t have been so profitable and empowering for the parasite “elites”, so they were rejected.

    Today when we ask, What is to be done?, the following are clear:

    1. This government does not serve the people but only robs and assaults them on behalf of criminals. The government has abdicated all alleged legitimacy.

    2. All taxation on the non-rich truly is robbery in that the extorted money is simply handed to the banks and corporations. This kleptocracy will never again institute public interest programs, and the ones that still inertially exist are all under relentless assault. The government’s goal is clearly to liquidate ALL non-corporatist spending, all spending which does not redistribute wealth upward, all spending which does not further aggravate the robbery of the productive citizens by verminous parasites.

    3. Taxation is not necessary to finance government operations, as borrow-and-spend has proven. So by now taxation is not practiced for finance purposes, but for social control purposes. The primary purpose of taxation is to force us all into the cash economy and keep down attempts to build economic alternatives. Taxation is intended to enforce government and corporate power.

    From these it follows that the obvious call is No Taxes on the Non-Rich. We must oppose all proposed tax increases, which will all be regressive. We must call every measure which would increase government extractions, no matter what it is, a tax, and oppose it under the No Taxes banner. We must demand an end to existing taxes, especially on our labor.

    (I’ll add that we need to start calling corporate exactions taxes as well. Corporations are extensions of the government. They cannot exist other than as manifestations of big, aggressive government.)

    Anti-taxation is a politically potent cause which ought to be able to unite diverse types for a single populist march.

    But like I said, the tea party types are actually mostly liars and schizoids about this stuff. They really want big government on behalf of the rich, and big taxation as long as it’s on the non-rich.

  3. alex

    Maybe Sarah Palin has the right idea. Instead of sending money to the government, the government should send money to us. That’s what they do in Alaska – every man, woman and child who lives there year round gets $X/year in “oil money”. The government sends you a check. I certainly never heard her object to this practice (which explains the absence of tar and feathers in her wardrobe).

    That’s the secret! Apparently it’s not socialism if you have moose burgers for lunch.

  4. jake chase

    Hamilton’s scheme was far worse than Hoagland’s summary suggests. The Revolutionary state debts assumed by the Federal govt had fallen to 5 cents on the dollar and were in the hands of insider speculators who knew what was coming. When the govt assumed the debts at par the speculators got a gigantic windfall much of which was used to buy up Western lands which were subsequently resold at big profits to actual settlors whose blood had been the price of extracting them from British hands.

    Of course, the income tax came much later, in 1913, accompanied by its evil twin, the Fed. These put the usury machine into high gear, endowing the banksters with limitless power to expand money and their stooges with the power to extract it for imperial purposes. The income tax was promoted as a scheme to ‘soak the rich’, but the 5000+ page Internal Revenue Code is largely devoted to loopholes for the rich and the major corporations, so guess who actually pays.

    Of course, it isn’t all bad. The non rich still have mortgages and student loans and credit cards. A 1913 dollar is now worth less than 2 cents.

    1. alex

      “its evil twin, the Fed”

      Is the evil thing about the Fed inherent in the central bank’s existence, or is it a matter of the way it’s run by its government appointees?

      “income tax was promoted as a scheme to ’soak the rich’, but …”

      For all that I think the federal income tax should be much more progressive, it’s still the most progressive major tax around. State and local governments are, for example, heavily funded by sales taxes, which are outright regressive.

    2. alex

      “The non rich still have mortgages and student loans and credit cards. A 1913 dollar is now worth less than 2 cents.”

      Ironic juxtaposition. It’s inflation that makes it easier to pay off those mortgages and student loans and credit cards. Simple rule: debtors benefit from inflation.

      Would the average American now be better off if we’d had such tight money policies that those 1913 dollars you have under the bed hadn’t lost any value?

      1. jake chase

        Well, we still have the inflation (although it no longer shows up in the indexes), how are all those debtors making out?

        Dishonest money makes people happy for a while but the piper inevitably gets paid. The banks and the Fed have created a world in which money is nearly infinite, but ninety to ninety five percent of the citizens in the world’s most powerful country now have a negative net worth.

  5. alex

    The problem I have with Hogeland’s posts is that he makes many assertions, for example about Hamilton’s motivations, without adding much evidence or even argument.

    There’s no secret that Hamilton was hardly a populist. For instance, even more than the other founding fathers he didn’t trust the rabble with the vote. But what he’s celebrated for is putting the US on a sound financial footing and encouraging industry. I don’t doubt that in doing so he had his own and his supporters interests in mind. But what superior alternatives to Hamilton’s approaches existed? Hogeland has written of the popular finance of Pennsylvania, but hasn’t offered any real details that I’ve seen.

  6. DownSouth

    I have very much enjoyed Hogeland’s posts to date, but this one falls far short of the quality of previous posts. In his confusion he spreads more darkness than light, and in doing so does little to distinguish himself from the Tea Partiers.

    Hogeland seems to be completely blind to one of Hamilton’s primary motives. He is correct in that Hamilton’s goal was “to combine a big public debt with vigorously enforced taxes earmarked for funding that debt.” But to what end? It seems to be lost on Hogeland that one of Hamilton’s primary objectives was to create a permanent, elite, aristocratic, rentier class.

    To think that conservatives have ever been anything but advocates of big government is laughable. The policy options are threefold:

    1) Good Government (Big taxes)

    2) Bad Government (Big taxes)

    3) No Government (Low taxes)

    “Good” and “bad” are of course normative terms. In the modern conservative mind, “good” means the security state and “bad” means the welfare state. In the modern liberal mind, it’s just the opposite. “Good” means the welfare state and “bad” means the security state. But both conservatives and liberals are in favor of big government and big taxes.

    Many Tea Partiers are duped into thinking that, by voting Republican, they are voting for option 3) No Government (Low taxes), when in reality they are voting for the security state. Many liberals are duped into thinking that, by voting Democratic, they are voting for option 1) Good Government (Big taxes) i.e. the welfare state, when in reality they are voting for the security state.

    Why would Hogeland omit the following from his glowing account of Hamilton, a worshipful account that, not unsurprisingly, he says is shared by both the Bush and Obama administrations?:

    The debate over the compatibility of wealth and democracy is as old as the republic. From the start, concern that the egalitarian-seeming United States of the late eighteenth and early nineteenth centuries might develop wealth concentrations to match Europe’s was a worry for many but also the guarded hope of an important few.

    Alexander Hamilton, who favored both a financial class and an aristocracy, would have cherished the possibility of such an elite.

    [….]

    On becoming the first secretary of the treasury in 1789, Alexander Hamilton presented Congress with a bold economic program. To secure the creditworthiness of the new U.S. government, he called for redeeming at full face value not only U.S. wartime debts and certificates but the debt instruments of the various states. Many of the latter had been bought up by speculators at very low prices. The second proposal was to establish in Philadelphia a national depository to be called the Bank of the United States, which would also facilitate the financial operations of the U.S. Treasury…

    Controversy swirled, and in 1785 the Bank of North America’s charter was revoked by the Pennsylvania legislature, if only temporarily, in response to complaints of the bank being controlled by an upper-class clique, giving loans mostly to well-connected merchants in Philadelphia and ignoring the rest of the state…

    “Assumption and funding,” as Hamilton’s debt redemption provisions were called, provided the nation’s first cornucopia for financial speculators. From New Hampshire to South Carolina, cliques of wealthy Federalist supporters and officeholders, using traveling agents, had bought as many of the federal and state debt instruments as possible at cut-rate prices… Lesser profit-seekers prowled through the backcountry, buying up old, unpaid certificates from veterans, widows, and storekeepers. A group of New York investors, given early information on Hamilton’s plans in mid-1789 by his deputy, William Duer, collected for as little as ten cents on the dollar some $2.7 million worth of South Carolina, North Carolina, and Virginia state Revolutionary debt. This was about one-third of the three states’ total…

    James Madison failed with his compromise to redeem at less than face value paper held by speculative (rather than original) purchasers. Still, the whole arrangement was in doubt until Hamilton made a deal with Jefferson, who later admitted not understanding what was at stake…

    Of the overall $40-$60 million disbursed by the federal treasury under the debt assumption and funding program, about half is thought to have gone to speculators. To emphasize its enormity, $40 million would have been almost 15 percent of the estimated U.S. gross domestic product of 1790! Just $20 million to speculators would have exceeded the entire $18 million take of Revolutionary War privateering and three thousand captured ships.
    ▬Kevin Phillips, Wealth and Democracy

    Non-speculators didn’t fare so well when Hamilton, as Hogeland adoringly gushes, “put the new nation on sound financial footing and secured its creditworthiness.”
    Take Pierre L’Enfant, for instance, the architect whom President Washington commissioned to design the new capital city. “He laid out the city on a plan never seen before,” observes Jacques Barzun in From Dawn to Decadence, “which took account of the uneven ground and permitted indefinite extension.” “The government owed L’Enfant a good round sum, which with characteristic congressional thrift was reduced to a pittance,” Barzun continues. “L’Enfant died penniless.”

    And then there was Pierre Augustin Caron de Beaumarchais, the playwright who created the two dazzling comedies The Barber of Seville and The Marriage of Figaro. “Beaumarchais had a double purpose,” Barzun explains. “He relished the idea of a people set free from tyranny.”

    Beaumarchais became the imaginary firm of Rodrigue, Hortalez, and Company. Its activities were officially forbidden, but it was to supply the Continental Congress with 200 cannon, with mortars, with 25,000 firearms and ammunition in scale, including 200,000 pounds of powder, besides clothing and camping equipment for 25,000 men. ..
    The score of ships that played their part at a critical moment in the war of independence were indeed Beaumarchais’ in the literal sense: the agent of Congress had promised to send back produce—-chiefly tobacco—-in exchange for war supplies. Noting came from America….

    Worse yet, when 40 years later Beaumarchais’ daughter, who had fallen into poverty, petitioned Congress for the 2.25 million francs still owed her father (Alexander Hamilton’s estimate in 1793) Congress replied: “Take one third or nothing.”

    None of the above hardly seem to be the actions of someone concerned with, as Hogeland characterizes Hamilton, “put[ting] the new nation on sound financial footing and secur[ing] its creditworthiness.”

    1. William Hogeland

      My “glowing account of Hamilton”? Refreshing, at least, since usually I’m accused of bashing him. Taking my “Founding Finance” posts together — especially the one on Robert Morris and the insider nature of the blue-chip portion of the founding public debt — should make it pretty clear whom I think got a windfall when the Hamilton program passed the Congress. Hamilton’s ultimate motives I’ve also discussed in highly critical detail in many other places (though I think they were more nuanced than DownSouth does). And my not quoting Kevin Phillps doesn’t necessarily mean I’m “omitting anything.”

    2. William Hogeland

      Plus Phillips rehashes the old idea, drawn from Madison, that there was a group of “original holders” of the debt who should have been discriminated from “speculators” in that debt. The distinction was Madison’s fantasy, clung to by Madisonians today. The original holders were speculators too. The popular-finance movement knew that; Madison didn’t (or didn’t want to).

      1. alex

        “The distinction was Madison’s fantasy …”

        Good point. Tell me though you think should have been done with the debts rather than the Hamilton plan. For that matter, what was the thinking of the popular-finance folks?

        1. JTFaraday

          I would like to know this myself because I have no idea. Although, looking into my crystal ball, I’m thinking they were anti-federalists already looking into their local fiefdoms.

          Maybe you should see if Hogeland’s heroes, “the farmer Robert Whitehill, the weaver William Findley, and the preacher Herman Husband,” are on the rolls of Congressional war debt holders who personally voted themselves a pay raise in the First Congress. Charles Beard has the list in his book on “Jeffersonian democracy.”

          John Adams, who Hogeland always appends with the title “The elite,” much as his contemporaries always called him “His Pomposity” and “His Rotundity,” was the son of a farmer. I guess some farmers are just more rotund than others– not that I’m trying to impute self interested motives to *everyone* or anything. (That would be too realistic).

          And, anyway, Hogeland says he isn’t interested in considering what the nationalists *might* have done otherwise, only with what they *did* do.

          1. William Hogeland

            “I’m thinking they were anti-federalists already looking into their local fiefdoms.”
            It really is possible that something more than the well-known federalist-v.-antifederalist thing was going on during the founding period.

            “… Hogeland’s heroes, ‘the farmer Robert Whitehill, the weaver William Findley, and the preacher Herman Husband,’…”
            I continue to wonder why my insisting that these people existed, and that their thought and action had cogency and significance, means that I make them my heroes.

            “John Adams, who Hogeland always appends with the title ‘The elite,’ much as his contemporaries always called him “His Pomposity” and “His Rotundity,” was the son of a farmer.”
            No, I don’t, but the firmness and clarity of Adams’s belief in keeping political power in elite hands is something he made no bones about, and it in no way conflicrs with his father’s being a farmer (he was one too). Herman Husband, by the way, was rich as hell.

            “And, anyway, Hogeland says he isn’t interested in considering what the nationalists *might* have done otherwise, only with what they *did* do.”
            Hey. That’s true.

            And on the “self-interest” issue: Again, it’s not that interesting to me whether everybody is driven by it or that some might not be. Robert Morris’s blatant self-dealing is banal; Hamilton’s (to my mind) incorruptible, lazerlike focus on shifting wealth into a few powerful, government-connected hands for what he perceived as the good, first and foremost, of the nation, not of himself, remains much more fascinatingly problematic.

          2. JTFaraday

            “I continue to wonder why my insisting that these people existed, and that their thought and action had cogency and significance, means that I make them my heroes.”

            Yes, but I’ve hunted through your other posts at the New New Deal–as you’ve imperiously bidden us to do–and unless I just missed it, I couldn’t say what that is. And I take it I’m not the only one under the impression that you haven’t demonstrated what you claim to have demonstrated, and it’s not just me.

            I’m open to the evidence–but where is it? Since you’re over here making evaluative judgments left and right, it’s an entirely fair question.

      2. Michael

        Hoagland’s claim about the original holders is too simple. Much of the paper that was ultimately assumed by the federal government began as IOUs to either soldiers or farmers or shopkeepers who then sold the IOUs to speculators where they began a process that turned them into securities. Woody Holton’s recent “unruly americans” has a lot of evidence on this as I am sure Hoagland knows. Madison may not have been all that concerned about them but they were there and part of the problem with taxation in the 1780s was the perception–probably accurate–that taxation was being imposed in order to pay off bondholders. That is the real irony between the tea party stuff and their idolization of the movement to the constitution. The immediate need for stronger mechanisms for taxation was to satisfy bondholders just as we are being sacrificed to certain bondholders today.

        1. William Hogeland

          “Much of the paper that was ultimately assumed by the federal government began as IOUs to either soldiers or farmers or shopkeepers who then sold the IOUs to speculators where they began a process that turned them into securities.”
          There was indeed a lot of badly depreciated state paper around, and speculators betting on the Hamilton finance plan were desperate to get their hands on it; it’s also true that those IOUs (basically forced loans made more or less at gunpoint to quartermasters) were the object of speculation, sometimes at fractions of pennies on the dollar. And some of those speculators were grubby latecomers to the game. But the point about the Madison-Hamilton “discrimination” argument is that the best tier of debt, the original federal issue of bonds, had been held since the 1770′s by upscale investors (i.e., speculators)and moved very little throughout the period. Madison either didn’t understand that or preferred for politucal reasons to construct the farmers’ and shopkeepers’ IOUs, bought in a rush toward the end, by both upscale and lower-rent speculators, as the “original” holding.

          “Woody Holton’s recent “unruly americans” …” Yes. Very good book. Holton and I see some of these things somewhat differently.

          “The perception–probably accurate–that taxation was being imposed in order to pay off bondholders.”
          Totally accurate. Morris had always made clear that that was the purpose of taxation. Hamilton openly carried the idea out. That’s what people meant (and mean) by “good credit.”

          1. JTFaraday

            Okay, so now you’re over here grading everyone’s exams, line by line–only you haven’t written your dissertation yet.

    3. William Hogeland

      And finally: when I say “whom I think got a windfall,” I mean “who I think got a windfall.”

      (And by “who,” I mean the 18th C. high-finance insiders whom I’ve been writing about.)

    4. alex

      ‘None of the above hardly seem to be the actions of someone concerned with, as Hogeland characterizes Hamilton, “put[ting] the new nation on sound financial footing and secur[ing] its creditworthiness.”’

      That’s only half-true. Assuming the debts of the states and paying off both them and federal debts did put the US on a sound financial footing and greatly reduce the interest rates the government had to pay. In a few years US debt went from being a wildly speculative investment to being salable at about the lowest interest rate of any sovereign country’s debt. And the state debt was an important part of the mix because before the Constitution, and inevitably in the early days after its ratification, it wasn’t clear that the states weren’t sovereign countries. For example, France sent 13 ambassadors. Furthermore the assumption of state war debts by the federal government was explicitly and unabashedly part of a political deal that was favored by the northern states (generally represented by Hamilton and the Federalists) because having fought the bulk of the Revolution they had greater war debts. In return the south got the capital moved to D.C.

      The devil is in the details though, and the fact that Hamilton’s wealthy buddies had the insider information on this deal happening is what was corrupt about it. The difference between Hamilton and say Geithner (I cringe at putting both those names in the same sentence) is that Hamilton enriched his buddies by putting the US on a sound financial basis, where Geithner enriches his buddies by destroying our financial basis. I’ll take Hamilton any day.

      ‘Non-speculators didn’t fare so well when Hamilton, as Hogeland adoringly gushes, “put the new nation on sound financial footing and secured its creditworthiness.”’

      Some of the non-speculators did. As half the money went to speculators, that means half went to non-speculators. Furthermore, the account of speculators benefiting from insider information on the Hamilton plan accounts for only about 5% of the money.

      “The government owed L’Enfant a good round sum, which with characteristic congressional thrift was reduced to a pittance”.

      Was Hamilton in congress? Was it the Federalists of the notoriously frugal Democratic-Republicans in congress that opposed paying him what he was owed?

      “Worse yet, when 40 years later Beaumarchais’ daughter …”

      Forty years after the Revolution Hamilton was long dead and his Federalist party wasn’t far behind. The Democratic-Republicans basically owned the place. They’re the folks who reduced taxes and balanced the budget by gutting the army and the navy, just in time for them to declare the War of 1812. It’s truly a miracle our country is still here after the way they ran that war.

      1. DownSouth

        alex said:

        The difference between Hamilton and say Geithner (I cringe at putting both those names in the same sentence) is that Hamilton enriched his buddies by putting the US on a sound financial basis, where Geithner enriches his buddies by destroying our financial basis. I’ll take Hamilton any day.

        Alex, it’s not easy to tell where you’re coming from, but more than anything else you seem intent upon protecting the image and reputation of conservatism. Today you’re on script, similar to what you were on this thread a couple of days ago.

        Sorry, but I think I’ll hold my fire for liberals like Bill Black and William Hogeland, as I’m more interested in keeping my own side of the political spectrum in order. Also with them I might have some effect, where with conservatives, because the ideological divide is so great, crossisng swords would have little effect. You must realize that I have no interest whatsoever in upholding or defending the reputation or probity of Toryism and conservatism.

        1. alex

          “it’s not easy to tell where you’re coming from”

          I’m flattered, since I prefer to (at least attempt) to think for myself rather than toe any particular party line.

          “more than anything else you seem intent upon protecting the image and reputation of conservatism”

          How so? By pointing out on the previous thread that not all political issues conveniently break down into a conservative vs. liberal split? Or on this thread by partially defending Hamilton and the Federalists? Trying to pin parties of over 200 years ago to our current liberal vs. conservative or Democrat vs. Republican split is pointless. The Democratic-Republicans were the ones who always wanted to lower taxes and shrink the government. Does that sound like modern day liberals or Democrats? The mix of issues was different then.

          “You must realize that I have no interest whatsoever in upholding or defending the reputation or probity of Toryism …”

          Toryism? Hamilton and the Federalists were Whigs!

      2. William Hogeland

        “Assuming the debts of the states and paying off both them and federal debts did put the US on a sound financial footing …”

        For “paying off,” insert “funding.” No matter how many times that key distinction is made, the notion that Hamilton wanted to pay off the debt keeps seeping back into the discussion. It’s partly thanks to biographers like Ron Chernow, who while praising Hamilton for “*funding* and assumption,” also keep saying Hamilton wanted to pay off the debt and implying that he’d had nothing to do with running it up. Regardless of what anyone thinks *should* have happened regarding the war debt — far from my concern — Hamilton himself was clear about what he wanted to do with it.

  7. Dan Duncan

    The Hogeland post is abysmal.

    First, he has the standard “Palin” reference, which, frankly is a sign he has no confidence, whatsoever, in his ability to to express a thought.

    As a defense mechanism, he’s hiding behind what he knows will be a Pavlovian response; only with acid reflux instead of saliva. It’s an Acid-Reflux Reflex.

    “Palin. Sarah Palin is dumb. Just want you guys to know that I’m with you, and that I think Sarah Palin is really, really dumb!”

    This way, even if what follows the Palin Introduction has the intellectual heft of an summer school essay written by a 10 grader who failed American History, Hogeland will have at least gendered some good will by capitalizing on his audience’s reflexive antipathy.

    As to the underlying post…

    If the Modern Tax Code is justified by reference to Alexander Hamilton, then Modern Wall Street is similarly justified by reference to Alexander Hamilton, who is known as…”The Father of Wall Street”.

    Weak.

    As a gesture of good faith, I’m going to help out Mr. Hogeland in his attempt to connect with his audience…

    Mr. Hogeland, feel free to go ahead and copy the last two sentences at the end of my comment. But next time make sure to append it to every paragraph of your essay! This way, you’ll really ensure a healthy and vital connection with your audience.

    SARAH PALIN IS DUMB. TEA PARTIERS ARE WHACKO.

    And your opening sentence will look like this:

    Hamilton is revered for putting America on sound financial footing, but he couldn’t have done it without federal taxation. SARAH PALIN IS DUMB. TEA PARTIERS ARE WHACKO.

    See how effective that is?!

    1. Paul Tioxon

      SARAH PALIN IS SO DUMB, SHE LET DONALD TRUMP STEAL THE BEST WACKO STORY AND ALL OF THE WACKOS ALONG WITH IT FROM HER!! HOW DUMB ARE YOU WHEN TRUMP MOVES INTO NUMERO UNO CONTENDER WITH YOUR DUMB MATERIAL? AND TRUMP DOES NOT EVEN HAVE TO WHERE A SKIRT AND PUT ON LIPSTICK TO DO IT!!!

    2. William Hogeland

      Since I don’t think Palin is dumb, and my reference to her doesn’t suggest that I do, I don’t know what Dan Duncan is on about here.

      And far be it from me to try justifying modern tax policy — or justifying anything else, for that matter.

      1. rps

        “Since I don’t think Palin is dumb, and my reference to her doesn’t suggest that I do”

        This is true. The reference, “Anti-Obama leaders from Sarah Palin to Donald Trump”

        Leaders? Anyone elses Gag reflex-o-meter kick in? Palin, Trump, and for good measure Jerry Springer are tv show celebrities. With a hefty mix of failed public office holders and bankruptcy. Opponents, hustlers, rabble rousers, propagandists, or zealots please. Leaders I dare say not!

  8. liberal

    The most interesting take I’ve seen on Hamilton as a plutocrat was provided by poster royls@telus.net on the usenet group sci.econ. E.g.:
    “The constitutional prohibition of direct taxation was by no means uncontroversial among the Founders. The Federalists — specifically, Madison and Hamilton, who were openly trying to bring the USA under plutocratic rule by a wealthy elite — led a well-funded and ultimately successful lobbying effort to prevent federal taxation of wealth, especially land. Many of the Founders, including Jefferson, Paine, Franklin and Adams, had no specific objection to direct federal taxes on wealth and land. They had read Locke, Montesquieu, Smith, and the French physiocrats, and understood why direct federal taxation of land, in particular, would be fair, appropriate, and natural.

    “However, there was among the Founders a strong thread of admiration for the institutions of republican Rome, even including the land tax exemption for the senatorial families. They did not understand how that tax exemption led to inevitable economic consequences that ultimately destroyed Rome.”

    1. DownSouth

      Well you certainly don’t have to worry about Hamilton or the Federalists putting a tax on land or, for that matter, any other form of wealth. As Kevin Phillips went on to explain in Wealth and Democracy:

      The government’s choice to pay for the refunding through new excise taxes, heaviest on the Appalachian back country, …added to the regional bitterness.

      Excise taxes are consumption taxes, which I believe are the most regressive taxes possible. Here’s how Wikipedia defines excise tax:

      Excise tax, sometimes called an excise duty, is a type of tax. In the United States, the term “excise” means: (A) any tax other than a property tax… Excise taxes are often seen as a tax on items like gasoline, tobacco and alcohol (sometimes referred to as sin taxes). The tax is usually a flat amount for a certain quantity of the item…

    2. alex

      “The Federalists — specifically, Madison and Hamilton”

      Madison was not a Federalist – in fact he was a key member of the opposing Democratic-Republicans.

      “The Federalists … led a well-funded and ultimately successful lobbying effort to prevent federal taxation of wealth, especially land.”

      Especially land? The Federalists mostly represented the plutocrats whose money came from finance, commerce and industry. It was the opposing Democratic-Republicans who represented the plantation owners and other agrarian interests whose wealth was tied to land.

  9. philhubb

    Until Aaron Burr’s face appears on the $10 bill, we can assume that we are under the old regime of the rentier Hamilton and his cohort.

    Unfortunately that famous duel took place years too late. But still, at least it happened.

  10. Jim

    Hoagland notes that Hamilton “…worked up a full-blown plan for connecting national wealth and even more importantly national credit to ambitious national aims.”

    Such goals, in the course of the 18th and 19th centuries, united the two ideological tendencies of “conservatism” and “progressivism.”

    Both of these ideological tendencies ended up sanctioning a novel, but massive public/private national economic system.

    However,a different type of political sensibility could be found in populism.

    In the 19th century the populist trajectory advocated a producer ethic that was anti-capitalist but not socialist or social-democratic.

    This populist sensibility offered a defense of endangered crafts (including farming), opposition to the new class of public creditors and to the whole machinery of modern finance as well as oppositon to wage labor.

    But by the end of the 19th century the populists had lost to what H.L. Mencken called the “civilized minority”–that grouping which would evenutally became our modern ruling elites.

    Does a reformulated populism(within a radically decentralized political structure) offer a way out of our current crisis?

    Does a post-modern populism offer a moral vision capable of bringing such a political movement into being?

    Does democracy work best when men and women do things for themselves with the help of their friends and neighhbors instead of depending on Big Capital and Big State?

  11. F. Beard

    Our first Secretary of the Treasury, Hamilton is celebrated by both establishment liberals and establishment conservatives: Willima Hogeland

    Well that’s sad because it betrays a profound ignorance of liberty and proper monetary policy.

    1) There should not even be a national debt so Hamilton is no hero for instituting one. In fact, he was a fascist to do so since a national debt loots the entire population for the sake of private interests, in this case the rich.

    2) Neither should there be a government enforced money supply for private debts, including gold or silver.

    3) Government, rather than borrowing money, should create its own tax money, debt and interest free.

    4) The private sector should be free to create its own monies that are only acceptable for private debts, not government ones, taxes and fees.

  12. krb

    Good debate!

    I think Hogeland et al are a little harsh in reviewing Hamilton however. He had faults, maybe his greatest being the lower respect he had for the lesser-read citizens of the infant republic. Contrary to popular belief he did NOT want an aristocracy or monarchy….read his own policy writings, not those of political rivals. And read them from throughout his career because like all of us, his views evolved….he made an asinine comment during the constitutional convention that rivals tried to make him carry the rest of his career that did not reflect any of his later actions or writings once in office. Outside of Washington, there is probably no other person from that era with more truly national motivations (over personal, or class) than Hamilton.

    The challenge it seems is to place ourselves in the midst of that era when reviewing his actions. Even his views on taxation seem reasonable considering the times and the potential benefits of consolidating the country behind a strong federal govt…..what got taxed (“sin” consumption) and by how much (not to such level that it would drive down consumption and drive down the revenue) seem reasonable both for the era and even today. He can hardly be blamed for the bad governance and tax policies we’ve suffered in the 200 yrs since. Even his views on preferential treatment of manufacturers over farmers are reasonable considering the era…..the new republic was TOTALLY dependent on British or French imports for manufactured goods….to ween the country off Europe, therefore less vulnerable to aggressive actions by Europe, and eventually to compete with Europe on equal footing, a manufacturing class needed to rapidly be developed to replace European imports. To equate current tax policies or current elite class preferential treatment with Hamilton’s policies, or to blame him for starting us down a bad road, seems a little naive or narrow minded. If not for Hamilton’s work we’d probably be speaking French now, having returned to colony status (some already wanted it by the early 1790s) long before the civil war broke out over disputes dating back to the Washington/Hamilton vs Jefferson/Madison era……cut the guy some slack. krb

  13. William Hogeland

    “…Hogeland et al are a little harsh in reviewing Hamilton…”
    Others here have called my take on Hamilton glowing and gushing … so maybe I’ve finally achieved “fair and balanced”? (Nah.) I do agree that the monarchist slam is more or less a red herring, but I don’t Hamilton’s elitist extremity as a “fault,” and I wouldn’t classify his remarks at the Constitutional convention as asnine.

    “Outside of Washington, there is probably no other person from that era with more truly national motivations (over personal, or class) than Hamilton.”
    What’s critical to realize is that both he and Washington sincerely *equated* national interest with class interest.

    “Even his views on taxation seem reasonable considering the times and the potential benefits of consolidating the country behind a strong federal govt…”
    Totally reasonable. I wasn’t calling them anything but. Hamilton very reasonably wanted to consolidate national wealth and credit in a few government-connected hands, and by nearly any means necessary. Few have ever been more clear or intellectually consistent in their goals.

    “…what got taxed (‘sin’ consumption) and by how much (not to such level that it would drive down consumption and drive down the revenue) seem reasonable both for the era and even today.”
    In my next post, I’ll be taking issue with that “sin consumption” concept.

  14. skippy

    I dub thee the elitist wars post.

    Where in order to battle one must elevate a small percentage of its population to mythical like status…cough…above it all.

    It is at this level that nations, populations, ideology, beliefs intersect, for what ever its worth. Too scrimmage for the planets resources as a means to an end…um running from our shared humanity…distance’s separation and its lack of shared time together, a gaping distance amongst a young species.

    Skippy…we are all the same…yet…we can not find the re-set button…sigh.

    1. DownSouth

      Skippy,

      You got it.

      If one listens to Hogeland or alex, one would get the impression that the Founding Fathers just fell off the back of a wagon and weren’t the product of three thousand years of Classical and Western history and civilization.

      That’s why I think Kevin Phillips’ analysis is far superior, because he at least goes back and starts his analysis in 16th-century Europe.

      One of the problems is that we try to cram an irrational world into a rational framework. In the medieval world we typically think of there being aristocrats and peasants. Of course this sort of dualistic generalization, a generalization which the “rationalist solution” requires, is where the problems begin to arise. The reality was much more complicated. There were many levels of aristocrats, and all classes of peasants, with peasants constantly struggling to break into the ranks of the aristocrats, and the petty aristocrats constantly struggling to remain aristocrats.

      Then in the 16th century a merchant and manufacturing class emerged, and by the later part of the 16th century its more successful members had consolidated into a burgher oligarchy that was the new kid on the block, and a very powerful kid at that. So now there were three classes: aristocrats, oligarchs and peasants and workers. But again these categories are gross generalizations. The peasants and workers strived to break into the merchant and manufacturing and landowning classes and the more successful merchants and manufacturers broke into the oligarchic class, who in turn were always trying to finagle some title that conveyed noble status upon them.

      In England, the aristocrats united behind a political and social ideology called Toryism and the oligarchs rallied behind a movement called the Whigs. Now pack all this up and ship it over to the new world.

      By the late 18th century it was possible to collect rents off not only land, but off capital as well (in medieval culture, Christians were prohibited from engaging in usury). So I don’t see how one can claim that Hamilton didn’t represent this class interest, or the social philosophy which provided its moral and intellectual justification, which is none other than Toryism. Granted, one can debate the pros and cons of the Tory philosophy, but to deny that this isn’t where Hamilton was coming from requires quite a healthy dose of historical revisionism.

      Jefferson and Madison were more ‘Whiggish’ in their thinking, being more concerned with the merchant and manufacturing class, and I would agree with Jim that the small freeholders, whom Jefferson had an especially warm place in his heart for, fell into this class.

      But who represented the non-propertied workers? Paine? But Paine wielded no policymaking power. So the non-propertied workers were deprived of a place at the policymaking table. And of course the thought of Blacks or Indians (or women) having any say in policymaking was completely out of the question.

      Non-propertied workers didn’t get their act together—-in the form of unions and labor organizing—-until the first part of the 20th century. Blacks and other non-whites didn’t get a place at the table until the second half of the 20th century.

      One of the great tragedies for rank and file Americans has been the inability, even though there are shared economic interests, to organize across cultural divisions. If everyday Americans could do this, they could operate as a counterweight to the Tories and Whigs (whose latest transmogrification I suppose could be called the neocons and the neoliberals). This was one of the central themes of Lawrence Goodwyn’s The Populist Moment, as well as Reinhold Niebuhr’s Moral Man & Immoral Society. The petty bourgeoisie (which includes low-level white collar workers, smalltime merchants and manufacturers, as well as smalltime farmers)sees itself as being culturally apart from the proletariat, despite, as Niebuhr puts it, “the logic of economic facts” which might seem to make it “a natural ally” of the proletariat. In addition there’s the “color line,” as W.E.B. Dubois put it, as well as religious cleavages. Organizing across these cultural barriers proved impossible for the Populist movement, and to this day represents an almost insurmountable hurdle to achieving any sort of economic justice in America.

      1. F. Beard

        By the late 18th century it was possible to collect rents off not only land, but off capital as well … DownSouth

        The rest of your comment was interesting but I object to use of the word “capital” when you should have said “money”. Capital is real things such as talent, skills, work ethic, energy, resources, factories, etc. Money can sometimes buy or rent capital but it is itself not capital.

        Please don’t do the moneyed classes any favors by dignifying their filthy money with the noble name “capital.”

        1. DownSouth

          William Hogeland,

          I’m not the least surprised at the amount of energy the banksters are expending to revive the reputation of Hamilton. He is, after all, their Godfather.

          If Hamilton were such a principled Tory, why has he not been defended on that basis? The philosophical groundwork has certainly been laid—-Emile Durkheim, Talcott Parsons and Leo Strauss being three of the leading proponents of the Tory social philosophy.

          But of course Toryism has its own moral code. Could it be that Hamilton and his fellow Federalists fell short of that code? Way short of it? Hamilton’s contemporaries apparently believed they didn’t live up to it, and this judgment came from all parts of the republic, from north to south and all parts in between. Here’s Phillips again:

          Funded debt, to Hamilton, was an engine of state and even a “national blessing.” He and his allies sought to create a private class of “money-men”…

          The mechanisms put in place from 1790 to 1792—-the Bank of the United States, funded long-term U.S. debt, federal assumption of state and local debt, and the forerunner of the New York Stock Exchange—-became the playground of the incipient speculator class… The first American wave of securities speculation came in New York and Philadelphia in 1791, as Bank of the United States shares climb from $25 to $60, peaking at $170 in some three months. Similar speculation developed in the new U.S. bond issues, and when the bubble around Bank of the United States and other bank stocks popped, Hamilton ordered the treasury into the market in March and April of 1792 to support the price of government debt. His allies sighed with relief over what by some accounts was the first U.S. financial bailout.

          These financial wranglings…helped split Washington’s original partyless government into the factions that became the Federalists and Democratic-Republicans. Jefferson, who resigned as Washington’s secretary of state in 1793, disparaged the Federalists as Tories, aristocrats, merchants who traded on British capital and “papermen” (bondholders, financiers, and investors); and his allies rose to the attack….

          By 1794, “speculator” became an effective political epithet. Massachusetts voters were asked to exclude them from the new legislature. Candidates in North Carolina were told to swear that they had never been interested in the funding system. “Archimedes,” in Philadelphia’s National Gazette, mocked the would-be aristocrats: Speculators, he said, ought to be classified by wealth and awarded titles (such as the Order of the Leech, and “Their Rapacities”).

          However many treasury payments wound up in prominent
          Federalists’ pockets, the party paid a steep price. Hamilton’s use of government banking and debt to reward a wealthy elite trespassed on the Revolutionary credo, as did the excise taxes so anathemous to farmers. Prominent Philadelphia and Manhattan Federalists were belabored for eating with golden spoons, serving sixteen wines with dinner, and playing “God Save the King” for President Washington’s state entrances. Several mansions from the late eighteenth century still stand in Philadelphia’s Fairmount Park, where Morris and Bingham had summer homes. Once called villas, as Morris, an admirer of Palladio, named them in 1795, they commemorate a surer Federalist sense of architecture than politics.

          Wealth and aristocracy remained a target through 1800 as the rich-poor gap widened in the major cities. The share of assets held by the top 10 percent in New York City climbed from 54 percent in 1789 to 61 percent by 1795, while much the same thing occurred in Philadelphia. New York and Pennsylvania were also the hotbeds of conspicuous speculation, and Pennsylvania farmers were the angriest over Federalist taxes. When the elections of 1800 gave Jefferson twenty of the two state’s combined twenty-seven electoral votes, the Virginian beat John Adams, and no Federalist ever again held the presidency.

          While Jefferson’s now-victorious party, the Democratic-Republicans, consisted of a more homespun and egalitarian crowd, during the new century’s first decade they overwhelmed the Federalists in part through equally partisan politics. These began with the National Debt Reduction Act of 1802 to repeal all internal taxes, take on no new debt, and reduce the existing national debt through tariff receipts. Bankers were glum, while Democratic-Republican farmers and frontiersmen cheered.

          And why is it that one of Hamilton’s greatest detractors is Kevin Phillips, a conservative? (And a principled conservative, I might add.)

          1. William Hogeland

            “Tory”: that’s a charged word to deal with here. Despite Hamilton’s high regard for and pursuit of hierarchy and executive authority, I wouldn’t call him a Tory. Others did, and do.

            Re Phillips: The young Phillips who developed the ruthless Nixon “Southern strategy” derided William F. Buckley as “Squire Willie” becasuse Phillps saw (brilliantly) the politcal future of conservatism as populism, not aristocracy. The Bush family are considered conservative, but Phillips’s kind of conservatism allied Phillips with liberals in assaulting what he saw as their dynastic ambitions and undermining of liberty. Regarding Hamilton, everything Phillips says about his finance plan is true, but where Phillips seees the most important result as the split between Federalists and the Democratic-Republicans he prefers, I’m looking elsewhere, for other significances, and I just don’t agree that when you really get down to where they lived, “Jefferson’s now-victorious party, the Democratic-Republicans, consisted of a more homespun and egalitarian crowd…” The critique by Phillips of Hamilton is much like that of Madison, and it’s intellectually completely consistent, to me, with Phillips’s kind of conservatism, which is the conservatism of that very Democratic-Republican patrty. If it’s useful to see liberalism as the ideology of capitalism, it’s also useful to see Hamilton as the liberal, and Madison’s attack on Hamilton’s projects as coming from a liberty-oriented Southern right. And as I keep saying, I think there was a another, radically different, equally significant, largely overlooked attack on Hamilton, coming from a kind of populist left, which Hamilton himself by no means overlooked: his programs were intended, first and foremost, to subdue that left.

          2. DownSouth

            William Hogeland said:

            Re Phillips: The young Phillips who developed the ruthless Nixon “Southern strategy” derided William F. Buckley as “Squire Willie” becasuse Phillps saw (brilliantly) the politcal future of conservatism as populism, not aristocracy.

            What did the Southern Strategy have to do with populism? What it had to do with is racism.

            That’s why I said above I could never be a conservative, because the ideological divide is just too great. Maintaining the racial order is part and parcel of Tory/conservative morality. Perfidy, dihonesty and theft are not. That’s why I believe Hamilton may have offended even Tory sensibilities.

  15. JTFaraday

    I’m going to take this out of Hogeland’s classroom upstairs and respond down here:

    “I’m thinking they were anti-federalists already looking into their local fiefdoms.”

    Hogeland: “It really is possible that something more than the well-known federalist-v.-antifederalist thing was going on during the founding period.”

    The relevant distinction here in the pre-founding stage wouldn’t be “federalist vs. anti-federalist,” the relevant distinction is your democratic finance vs. my “local fiefdom.”

    In my untested thesis, therefore, I would anticipate that your democratic financiers would later be anti-federalists in an attempt to shore up the possibility of retaining their local fiefdom, as opposed to being subjected to the nationalist elites.

    Not wanting to be subject to nationalist elites (or Robert Morris)–while understandable– is not the same thing as “democratic finance,” which is the evaluation I’m still waiting for you to back up.

    The local financial fiefdom, in this sense, is completely analogous to your “John Adams, His Eliteness” in the realm of political theory, who could go guns a-blazing in favor of independence but liked his mobocracy tempered.

    Because, honestly, you don’t see people getting into finance with pure motives all that often.

  16. William Hogeland

    While JTFaraday is never going to like my tone, I find JTFaraday’s comments right on point for trying to refine the issues beyond what can be said in a broad-stroke, 1000ish-word blog post. It’s not a “classroom” just because the writer of the original post has the temerity to enter the discussion displaying some necessary confidence (though nothing beyond what’s shown by others here) in what of course is only an interpretation, whose deepest bases are not, I know, on display here, and can’t be.

    Except via the apparently offensive suggestion that readers might want to check out narratives, references, ideas, etc., in my and others’ far more organized bodies of work, detailed evidence is not going to be presented in this context. In a scattershot way, my blogging extends, riffs on, etc. — not substitutes for — books, articles, endnotes, etc. The downside of blogging, to me, is that people keep trying to win complicated arguments in big, fell swoops of brute fact or quote, which other people hope to demolish once and for all with other facts or quotes. Fury ensues. That’s why I gravitate toward JTFaraday’s comments here (among others’), which resist making overbearing go-for-broke coups de grace and use questions to challenge premises.

    As to premises: I see some local finance fiefdoms as going federalist, others antifederalist, and yes, I’m suggesting that there was a third way, which federalism in its essence was dedicated to crushing and antifederalism sometimes ignored, sometimes misunderstood, and sometimes pandered to. Lines between local fiefdoms and the economic radicalism I’m talking about — something sharing Paine’s brand of idealism about a new way of running the world (and in bringing that up, should I also note that I’m not necessarily promoting it?) — are not, indeed, always hard, and evaluating the purity of people’s motivations is beyond me.

    But my premises in the blog posts do involve identifying within the large group that objected to Morris-Hamilton finance (which includes both Adams and Madison, e.g., along with less well known members of local elites, lower-level speculators, etc.) an overlooked and critically important mentality that dissented just as strongly from Madisonian-Jeffersonian privilege, thus complicating the boring Hamilton-v.-Jefferson binary. This something does not even prefigure Jackson, really (though Findley would probably be the proto-Jacksonian leaner in this constellation); it’s something far more economically radical than either Jeffersonian or Jacksonian democracy, something homegrown American (not French, that is), with roots in 17th C. English evangelicalism, as well as in elements of Enlightenment rationalism (interpreted somewhat differently from the ways in which the famous founders did), something even sharing oddball elements of the high-Whig thinking that in other ways it opposed — a movement that Hamilton’s finance plan was specifically and precisely constructed to crush (that’s how significant it was! many historians to the contrary), and which Madison’s classic objections to that plan by no means represent or even necessarily comprehend.

    That’s all. It’s another way of looking at the founding, and I think it helps explain a multitude of things that “consensus” historians across the political spectrum never have, rehash the dull, old binaries as they will; I think it throws new light on the entire arc of American history, backward through the colonial period and up to today, and that’s what I work on. More detail elsewhere, and thanks to Yves Smith for posting and commenters for commenting.

    1. krb

      Mr. Hogeland,

      Ok, you’ve got my attention and I’m looking forward to “….More detail elsewhere….”.

      When that detail comes, please account for the potential changed path of history as well, all of it. As I alluded to earlier, critiques of historical actions or policies seem easy enough. But it also seems like we conveniently assume the negatives of any policy could have been improved upon, while the positive byproducts and the rest of history would have still been exactly achieved……that seems impossible to know. Had Hamilton et al pursued different finance policies the path of history could have taken another route as soon as 6 to 18 months later…..it was an extremely volatile and uncertain time, with talk of our own possible civil war and talk of siding with the French in their outbreak of war with England going on at the same time as Hamilton was formulating his economic theories. To suggest different policies could have been pursued at the time, and then claim to predict with any degree of accuracy how the rest of history would have flowed in the next few years, let alone the next 200 years, seems like a real stretch. I’m looking forward to your “…..More detail elsewhere….”. Thanks, krb

      1. William Hogeland

        Thank you — and the comment inspires what I now swear on a stack of Bibles is my last on this thread. I must say again that in writing critically rather than monumentally about the founding period, in no way am I trying to suggest that the policies of the era should have been improved on or that different policies should have been pursued; nor am I claiming that if they had been, I or anyone else could possibly predict how things would have gone. And I don’t see how my reading of Hamilton’s program could possibly suggest that as my motivation. I dig into what Hamilton, among others, actually did, and what they were trying to achieve in doing so. When I do that, I run up against a host of pre-existing ideas that my analyses tend to contradict. So I guess it sounds as if I’m attacking Hamilton, but I think what I’m doing is trying to improve understanding of Hamilton. I think, for example, that despite all the undeniable volatility and uncertainty of the period, Hamilton’s focus in forming his finance plan was relentlessly on preventing the instability he saw not first and foremost in potential civil war among the developing congressional political parties and their out-of-doors supporters, say, or a possible alliance with France (as much as those issues did concern him), but in the advances of the popular finance movement. Quelling that movement, while in my view and others’ central to Hamilton’s policies, keeps getting left off almost every well-known list of issues he was confronting and trying to address, thus limiting our understanding of what he himself made no bones about being up to. Because you can’t get this stuff from Hamilton’s biographers or from most other authors of mainstream, general-reader histories of the period (and precious few academic ones), I hock away at it, because without it, I think we’re mising what the man was all about. “More detail” is already out there. I’ll refrain from pushing here my own narrative books on the period but recommend the academic historians and economists Terry Bouton, Robert McGuire, Woody Holton, E.J. Ferguson, Thomas Ferguson, and Gary Nash. And there are others. Thanks again.

Comments are closed.