October 15, 2008

On Sunday night, while listening to “€œFOX news contributors all”€ clarify our current financial crisis, I picked up a remark by William Kristol indicating that our stock market and banks should be “€œmore closely regulated.”€ Kristol went on to explain this regulation accorded “€œwith the system of democratic capitalism created for this country by Alexander Hamilton.”€ The other news contributors listened with rapt attention, like devout Christians who were hearing a recitation of the Nicene Creed.

The problem with this recitation of neocon revealed truth is that it is based on an anachronistic attribution to Hamilton of a position he didn”€™t take”€” or certainly not in the way that Kristol suggests. Even a cursory reading of Forrest McDonald’s heavily researched biography of our first Secretary of the Treasury or the more accessible and more recent study by Ron Chernow suggests that Hamilton distrusted “€œdemocracy,”€ feared the populace being allowed to meddle in affairs of state, and once toyed with the idea of a government for the freed American colonies closely resembling the British monarchy. In his longtime battle in the state of New York with the Jeffersonian populist George Clinton, and in alliance with his patrician father-in-law, Philip Schuyler, Hamilton developed “€œthe besetting fear,”€ according to Chernow,”€ that American democracy would be spoiled by demagogues who would mouth popular shibboleths to conceal their despotism.”€

Whence came Hamilton’s famous hatred of the French Revolution, leading to his support for the counterrevolutionary order in Europe against France’s attempt at establishing universal “€œdemocracy,”€ an undertaking that resulted in a bloody terror, armed crusades to spread human rights, and finally Napoleonic despotism. While Hamilton settled for a constitutional republic on these shores weighted, he hoped in favor of educated property-holders, it would stretching a point to describe him, beyond his youthful infatuation with democratic localism, as a “€œdemocrat,”€ as in the neocon stock phrase “€œdemocratic capitalism.”€

As secretary of the treasury under Washington, Hamilton favored extensive federal interference in the young nation’s economy, but he did so neither as a disciple of Adam Smith nor as a predecessor of AEI. His views on national economic development, as set forth in his Report on Manufactures (1791), epitomize European mercantile thinking, calling for a tight system of tariffs to protect infant industries and to keep out foreign competition. His attempts to jumpstart American commerce by setting up communities devoted to “€œuseful manufactures,”€ as in the case of Great Falls outside of Paterson, New Jersey, corresponds to what was done in European states in the eighteenth century. Hamilton was simply a more intelligent mercantilist than most of his European counterparts, and he was dealing with far greater natural resources and a broader middle class than Maria Theresa of Austria or Catherine the Great of Russia had had available in the Old World.

Hamilton’s most influential European admirer was the German historian Hermann Eduard von Holst (1843-1901), a meticulous researcher in whose Constitutional and Political History of the United States (1873-1891) Hamilton emerges as the predecessor of the German Chancellor Otto von Bismarck. Holst defended Hamilton for combating “€œregional particularities”€ and for forging a Germanic nation with a unitary economic policy. Holst’s unfulfilled dream was to see an alliance between the German Empire and the country that Hamilton as a nationalist and mercantilist had done so much to build. Holst, like Hamilton, had been an outspoken opponent of slavery but hardly a modern democrat. 

A final observation: The attempt to elevate Hamilton into a founding father of the present American system did not start with the neocons. It began with defenders of the New Deal, who were looking for a useful precursor for their big-government projects and who overlooked Hamilton’s anti-egalitarian sentiments for the sake of their invented genealogy. This tendentious appropriation of Hamilton foreshadowed the practice launched by George Will and Gertrude Himmelfarb in the 1980s, of presenting Aristotle, Burke, and Disraeli as forerunners of the democratic welfare state. It is of course natural that each time one plunges more deeply into unknown waters, one claims that everyone of any importance had been there before.


Sign Up to Receive Our Latest Updates!