Hamiltonian Democracy

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Being in a historical mood of late, my mind has found it’s way back to one of my favorite periods, that of the American Revolution. I continually find something new and fascinating when studying the great figures of that period. In fact, recent scholarship has begun to break out of the idealized images of “The Founding Fathers” many of us were taught in school to give more three dimensional portraits of them as great men with human frailties and flaws.

One of the most overlooked of these men, perhaps because he was one of the most flawed, was Alexander Hamilton . Along with his political adversary James Madison and his personal enemy (and eventual killer) Aaron Burr, Hamilton was part of some of the most dramatic and far reaching events that took place after the revolution was over and the nation building had begun.

Sometimes the most important history is the most easily forgotten.

The following excellent examination of Hamilton and his role in American finance is reposted from the Boston Review.

Inventing Alexander Hamilton

The troubling embrace of the founder of American finance

Welcoming visitors to the U.S. Treasury Building’s columned entrance, which faces Pennsylvania Avenue on the green edge of the National Mall, is a statue of Albert Gallatin. A Swiss-born sophisticate who was dandled as a child on Voltaire’s knee, Gallatin served as the nation’s fourth treasury secretary, first under Thomas Jefferson and then under James Madison. His statue was erected in 1947. For sixty years, Albert Gallatin has been represented as the founding father of the Treasury Department.

Behind the building stands Alexander Hamilton. The first treasury secretary, Hamilton was for all practical purposes the creator of modern American finance and the founding wealth of the United States. This is, by rights, his house, and he’d be horrified to see his mortal enemy, whom Hamilton once tried to hang for treason, lording over its entrance while his own likeness is consigned to its back end.

Hamilton’s weakened position came partly from changes in city planning: the original front is now the back. But Gallatin’s symbolic prominence is no accident. The move to erect the statue began during the New Deal, when the Democratic Party was carrying on a romance with all things Jefferson. Great Depression–era Democrats identified the true founding not with the first election of 1788 but with that of 1800, when Jefferson’s party beat Hamilton’s, whose legacy New Dealers condemned as elitist and anti-democratic. There is rich irony, of course, in New Deal Democrats’ claims on Jefferson, who objected to Hamilton’s policies precisely because they relied on federal activism and central economic planning—approaches to government that FDR took to extremes. The party in power nonetheless busied itself with carving Jefferson’s face on the nickel and on a mountain, building him a big white memorial as opulent as Lincoln’s and Washington’s and, for decades in both public and academic history, pushing his reputation at the expense of Hamilton’s. The injustice at the Treasury doors is only the lowest blow in a long fight to take Hamilton down.

Now, a Hamilton revival is not only under way but an accomplished fact. Wrestling anew with Hamilton’s contributions to national politics and economics could be both fascinating and worthwhile. But Neo-Hamiltonians, like the latter-day Jeffersonians of the ’30s and ’40s, have been eagerly chopping up the past to make it conform to their political aims. Hamilton’s national vision and founding economics are far more troubling—and therefore more compelling—than his promoters acknowledge. And because Hamilton’s legacy is being invoked as a beacon for current policy, the emerging picture is a dangerous one.

The rehabilitated Hamilton was first presented to general readers in two biographies, Richard Brookhiser’s Alexander Hamilton: American (1999) and Ron Chernow’s best-selling tome, Alexander Hamilton (2004). The authors share a thesis: today’s America is not Jeffersonian but Hamiltonian—a blend of high finance, central banking, federal strength, industrialization, and global power for which we are indebted to the rare imagination and existential derring-do of our founding treasury secretary. “The Man Who Made Modern America” is how Brookhiser put the argument in the subtitle of an exhibit he curated for the New-York Historical Society in 2004. Short on substance, long on projecting gigantic videos of such things as modern bridges and contemporary military training, and full of relentlessly one-sided portrayals of Hamilton’s critics as driven by myopia and animosity, the exhibit was lavishly produced and promoted as a blockbuster.

This year, Hamilton crossed all the way over to pop. The once “forgotten founder” is now the subject of a PBS American Experience feature, which aired in the spring and is likely to live on in classrooms on DVD. Between scenes of bewigged actors reciting their characters’ written prose in awkward soliloquy, Chernow and a raft of other historians relate an even more vaulting story than those told in the exhibit and the biographies. Some of the talking heads give Hamilton virtually sole credit not only for founding the American financial system, but for the country’s very nationhood.

There’s a wonkish side to the Hamilton revival too. Certain policy writers, way ahead of the curve, have been contributing to its torque, shooting Hamilton’s legacy past history buffs and toward the halls of power. In 1997 David Brooks and William Kristol published a Wall Street Journal op-ed making an early case for what the authors called “national-greatness conservatism,” a theme they’d been developing in articles for the Weekly Standard, which Kristol helped found and where Brooks was senior editor. Looking for activist-government leaders that Republicans could love, they came up with Teddy Roosevelt, Henry Clay, and Alexander Hamilton—anything but bleeding-hearts of what Brooks and Kristol called “the nanny state”—who nevertheless saw an important role for the federal government in setting and achieving ambitious national aims at home and abroad.

Since then, as Brooks has become a New York Times columnist and TV pundit, he’s pressed the theme that Hamilton personifies national-greatness conservatism. In a major essay in the New York Times Sunday Magazine in 2004, he described Hamilton as author of a conservative tradition favoring limited government activism in service of social mobility and national unity. That same year he raved up Chernow’s biography in the New York Times Sunday Book Review. Indeed, pairing the national-greatness theme with Hamilton grew more intense after September 11. For the swearing-in of Treasury Secretary Henry Paulson in 2006, President George W. Bush’s speechwriters went out of their way to note the importance of Hamilton’s legacy, and Paulson himself remarked that his father had been “a real Alexander Hamilton fan.” The Hamilton cause drew financial support—for both the Historical Society exhibit and online components of the PBS special—from the Gilder-Lehrman Institute for American History, whose founders Richard Gilder and Lewis Lehrman have backgrounds in such conservative organizations as the Club for Growth and the Project for the New American Century.

Neo-conservative claims on Hamilton came to a head when Brooks, in a June 8 New York Times column on economic issues in the 2008 election, announced outright that he and like-minded others were “Hamiltonians,” who hold the rational balance among radical populists, tinkering liberals, and knee-jerk anti-government conservatives.

Hamilton’s reputation has bloomed on the liberal side, too, with the Brookings Institution’s “Hamilton Project,” which is dedicated to proposing “pragmatic policy responses that will create new opportunities for middle class affluence, bolster economic security, and spur more enduring growth.” Emphasizing Hamilton’s immigrant status and impoverished background, the project describes Hamilton as a representative of American traditions of opportunity and upward mobility. “Broken Contract,” a widely discussed paper by the project’s policy director, Jason Bordoff, published in the September issue of Democracy, sets out an agenda clearly inspired by this vision of Hamilton. An essential promise of American democracy—families who work hard and prize education can expect their children to advance economically—is in danger of being broken, Bordoff argues, but the extreme solutions coming from the left and the right will fail. He proposes instead maintaining mandatory forms of social insurance, making heavy investments in training and education, and increasing individual responsibility. The Hamilton Project’s advisory council boasts Democratic Party luminaries such as Robert Rubin, Roger Altman, and others redolent of both the Clinton-era pragmatism and New Deal liberalism espoused by Bordoff.

That the Hamilton revival admits conservatives and liberals alike gives it obvious appeal. But if opinion-shapers really want to strengthen democracy by enhancing competition, opportunity, and mobility, Hamilton is not their man. Nor did he want to be. Neo-Hamiltonians of every kind are blotting out a defining feature of his thought, one that Hamilton himself insisted on throughout his turbulent career: the essential relationship between the concentration of national wealth and the obstruction of democracy through military force.

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That’s putting the matter bluntly, and bluntness is necessary. Time and again this galvanizing principle in Hamilton’s political life has been denied, ignored, and glossed over by his proponents, who thereby risk distorting the entire founding period. One can gain a refreshingly focused picture of Alexander Hamilton simply by looking at episodes in his public life, far from minor, that the rehabilitation industry’s guiding storytellers have done their best to downplay or leave out all together.

Among the most revealing of these was his participation in the dramatic events known as the Newburgh Crisis. Passed over in silence by the PBS biography, this affair launched the mature stage of Hamilton’s relationship with George Washington and placed him for the first time at the center of public finance. As such, it was nothing less than a profoundly formative experience in Hamilton’s life as a political actor.

In 1782, fresh from serving as a battalion commander at the Battle of Yorktown, Hamilton, 27, joined the Confederation Congress as a delegate from New York and entered into a scheme to threaten the Congress with a military coup. As executed by the Congress’s superintendent of finance (and Hamilton’s finance mentor), Robert Morris, his assistant Gouverneur Morris (no relation), and Hamilton (their promising young protégé), the idea was to encourage Continental Army officers—deployed, after victory at Yorktown, in a cantonment at Newburgh, New York—to refuse to lay down their arms unless the states acquiesced in Robert Morris’s longstanding insistence that the Articles of Confederation be amended to permit the collection of federal taxes from the whole American people. In Morris’s plan these taxes, collected not by weak state governments but by a cadre of powerful federal officers, would be earmarked for making hefty interest payments to wealthy financiers—including Morris himself, along with his friends and colleagues—who held millions of dollars in federal bonds, the blue-chip tier of domestic war debt.

The first tax Morris wanted Congress to pass was a duty on foreign goods, known then as an impost. Both Chernow and Brookhiser focus exclusively on the impost, but Morris assured his supporters that once Americans were accustomed to paying federal tax, a slate of land taxes, poll taxes, and taxes on domestic products would soon follow. The idea, in Morris’s phrase, was to “open the purses of the people” in order to enrich the interstate investor class, place American wealth in a few powerful hands, and create a unified nation poised to become an empire.

The officers at Newburgh were disgruntled because, with the war effectively over, promises about pay and pensions had not been met (Morris routinely paid financiers before soldiers). When they sent a delegation to Congress to demand payment, Hamilton and the Morrises urged them to make common cause with the investor class by insisting on pay in federal bonds. Hamilton channeled Congress’s panic about military takeover by insisting in resolutions from the floor that federal taxes be dedicated not just to officer pay but to funding all bondholders. He also took the immense risk—executed with remarkable coolness—of writing to Washington, on whose military staff he’d once served, to invite him to lead the threatened coup. But Washington’s loyal officers spurned the Morrises’ overtures, and when the conspirators in Congress reached out to Washington’s enemy General Horatio Gates, a mutinous plan developed at the Newburgh camp to give Gates command of the army.

It was all quite a scene. A high point was reached when, at a meeting in Newburgh, Washington leveraged his officers’ affection to disable Gates, quell mutiny, and prevent military takeover of Congress. Hamilton’s correspondence during and after the crisis reveals a young man working assiduously to cover every bet: he subtly adjusted his solicitation of Washington when it became obvious the great man wouldn’t play; he didn’t scruple to criticize, even partly rat out, his fellow conspirators; and he confessed to Washington certain aspects of his own participation in the conspiracy, while covering up others; in one letter draft he even crossed out a reference to it. A reader of this richly entertaining bob-and-weave can only stand in awe of Hamilton’s conjuring a role as Washington’s congressional informant and confidant from participation in a treasonous conspiracy. He set up his entire career!

Certain aspects of the Newburgh Crisis are worth arguing about. (How willing were the Morrises and Hamilton to support an actual coup? Were they gambling on avoiding one at the last minute? How would they have controlled events if the Gates mutiny had succeeded?) What hasn’t been at issue in any serious way since E.J. Ferguson and Richard Kohn wrote about these events in the 1960s and ’70s is Hamilton’s eagerness to avoid applying the rule of law to his view of what was best for the country. He was developing an urgent desire for authoritarian government, whose well-funded debt, supported by nationally enforced taxes, would increase the wealth of the richest class of Americans and yoke that class to national purpose. He bet everything, including his reputation as a loyal patriot, on forging a common project between the military and the investor classes to override the will of elected governments.

Hamilton’s gambit with the Morrises illuminates the style in which he would conduct his entire political career. So it is not surprising that both Chernow and Brookhiser usher readers hurriedly past Newburgh. Chernow’s narrative (which takes up only four of his 731 pages) omits the participation of Hamilton’s all-important mentor Robert Morris, whose controversial, at times openly corrupt efforts of the 1780s were instrumental to Hamilton’s successes in the 1790s. Chernow claims that Hamilton feared, rather than encouraged fear of, military outbreak, yet a few sentences later shows Hamilton “playing with combustible forces” by suggesting that Washington take the lead. Chernow characterizes Hamilton’s writing to Washington as mere deviousness, which he excuses by noting that Gouverneur Morris (not identified by Chernow as Robert Morris’s assistant) pursued the same stratagem with other officers.

Also contextless in Chernow’s rendering is the situation at the Newburgh camp itself, which somehow, inexplicably, grew “more incendiary”: we do not learn that Robert Morris stoked the fire by offering Gates support for outright mutiny. Sustaining the distortion by quoting selectively from the Hamilton-Washington correspondence, Chernow describes Hamilton applauding Washington’s judgment in quelling the coup. He persistently gives glimpses of Hamilton where glimpses favors him, snatches him out of sight where he is manifestly implicated, acknowledges a little naughtiness, and declines to tie the threads together. The result is falsification of the Newburgh episode and a picture of Hamilton cleansed of all the existential daring, so outrageous and so troubling, that was the true source of his brilliance, and which would mark all of his later successes and failures.

Brookhiser makes the most dramatically revealing episode in Hamilton’s early career disappear completely. His background on Newburgh consists of one sentence informing readers that the desire to raise money through federal taxes was motivated by a need to pay soldiers, implying that paying interest to creditors was a tertiary consideration necessary only to acquiring a foreign loan. Gone are the bondholders, whom Hamilton and Morris themselves told Congress were a primary consideration; for them, paying foot soldiers was literally never an issue. Absent from Brookhiser’s treatment is the work of Ferguson, who devoted a detailed book to Revolution-era finance that is required reading for anyone trying to explain Hamilton. Brookhiser’s only cited sources for his discussion of Newburgh are two of Hamilton’s most enthusiastic, least probing earlier biographers.

The fuzziness that both biographers bring to pivotal moments like the Newburgh Crisis extends to the nature of the Revolutionary War debt itself, thus also obscuring Hamilton’s all-important relationship to it. Chernow claims that nationalists like Hamilton and Madison wanted to place Congress in a position to “retire the huge war debt.” Precisely the opposite is true: led by Morris, the nationalists wanted, as they said repeatedly, to fund the debt—a distinction key to Hamilton’s national vision and to the finance plan he carried through Congress at the dawn of the 1790s. Both in his book and in the PBS biography, Chernow treats the debt as something that, having been run up, somehow, to regrettable proportions during the war, confronted Hamilton as an unfortunate problem when he became treasury secretary. In fact, Hamilton had spent all his time in Congress, influenced by Morris and his own reading in finance theory, trying to protect and swell the debt. When he took office in Washington’s cabinet, Hamilton brought years of frustrated effort to fruition at last.

Brookhiser doesn’t say that Hamilton wanted to retire the debt, but his discussion of the funding plan again makes something disappear: the blue-chip tier of bonded debt held by Hamilton’s and Morris’s friends, to which Hamilton showed considerable devotion. Brookhiser describes instead the kind of debt represented by the government’s wartime IOUs; he rehashes Madison’s attempt to distinguish between chits still held by soldiers and farmers and chits that soldiers and farmers had already sold to speculators. But Ferguson, as well as Stanley Elkins and Eric McKitrick, in their magisterial The Age of Federalism (which Brookhiser cites elsewhere), showed years ago that the distinction between original holders and speculators was largely bogus and distracting. Hamilton certainly thought it was. That’s because the most significant portion of the debt was held by few people and moved very little; speculators in lower tiers of debt included people like Morris and his cohort, who were also “original holders” of the best tier.

David Brooks, for his part, embraces the thrust of Hamilton’s finance plan, writing that Congress’s decision to fund the federal debt at Hamilton’s urging formed the basis of “the fluid capital markets that are today the engine of world capitalism.” The quick-and-dirty textbook version is that Hamilton gave the country sound credit. What that means is rarely made explicit: the first treasury secretary found ways to support, at all costs, the federal bondholders whom he and Morris had been frustrated in supporting in the 1780s. In 1791 Hamilton finally got the U.S. Congress to commit to paying reliable interest on its debt instruments, halting both their face-value depreciation and the free-for-all speculation in them, making them articles of rational trade in high-finance marketplaces. (Following British models, Hamilton also used proceeds of the U.S. Post Office to create a “sinking fund”; such funds were dedicated to paying down each issuance of a public debt, making bonds reliable.) Hamilton’s idea, bold and creative, was to let the government get its hands on easy money by letting bondholders and traders grow American fortunes lending that money.

Brooks also associates Hamilton’s authorship of modern capitalism with what historians call “assumption”: Hamilton persuaded Congress to assume the states’ war debts in the federal one, thus swelling the federal obligation to massive proportions. But that idea wasn’t original with Hamilton, and by overlooking its history Brooks and other Hamiltonians obscure its purposes. Robert Morris too had wanted the Confederation Congress to assume state debts, placing all public debt in federal hands and making it so big that federal taxes would have to be levied to pay interest on it. That dream came true when the U.S. Congress, having agreed to assume state debts, ran up a deficit, as Hamilton was happy to report in December of 1790.

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A new tax, Hamilton told Congress, was the only way to solvency. He proposed not only expanding duties on imports (the old, embattled impost had finally been passed in the first session) but far more significantly, he urged Congress to impose the first federal tax on an American product. Just as Morris had hoped, assumption of state debts had become the wedge for “opening the purses of the people,” enforcing domestic federal taxation to support federal bondholders. In fact, passing a federal domestic tax (on distilled liquor, a fact that has helped obscure its real purpose) was so important that in the first funding proposal he submitted to Congress Hamilton appended a fully drafted bill. It was characteristically Hamiltonian (and reminiscent of health-care-reform-era Hillary Clinton), replete with distilling and tax-policy minutiae and overwhelmingly, even patronizingly, thorough, with every loophole closed, every question pre-answered, every problem sure to be caused by Congress’s financial ineptitude solved. The bill was controversial, and Hamilton’s patience must have been tried when Congress, seeming to bumble, passed funding and assumption yet ignored the whiskey tax—the brilliant law that would pay for them. But he was becoming a politico. In reporting the deficit, he calmly referred Congress back to the tax law he’d already written for them almost a year earlier. They were politicos too. They passed it—now that they had to—almost unmodified.

The structure of that tax sharply qualifies assertions made by Brooks and others that Hamilton wanted government power to enhance opportunity, mobility, and democracy. The reasons Hamilton gave Congress for going beyond a foreign impost and imposing domestic taxation are telling, both for what he said and for what he left unsaid. In the same 1790 report Hamilton reminded Congress that merchants, naturally, paid import duties, and that since merchants had always been the class most committed to American nationhood, taxing them further would be onerous and disaffecting; hence the need for a new tax not on imports but on a domestic product. What he did not explicitly point out was that the merchant class was also the bondholding class: they’d long been nationalists because federal power—the very kind Hamilton was wielding now—had long seemed to be where their interest lay. Today we might expect investors to be content with steady, tax-free income (there was, of course, no income tax). For Hamilton, shoring up and concentrating bondholders’ wealth meant paying that income with funds drawn not from the small bondholding class but from a tax collected from the large class of people who would never own a bond. And he structured the tax around aspects of the distilling process itself, so that big-time distillers (industrialists, members of the bondholding class) would be charged a lower tax while small-time producers (people engaged in a wide variety of work as farmers and artisans, with whiskeymaking often their sole source of cash and credit) would be charged a substantially higher tax, in many cases a crushing one. It was no accident. The bill was modeled on a series of whiskey taxes passed by British governments. Driving small and occasional producers out of business served imperial economic aims of efficiency and consolidation. In the same year that Congress passed Hamilton’s whiskey tax, the Irish Parliament stopped merely “dis-incentivizing” small distilling, and made it illegal to operate a still of less than 500-gallon capacity.

Hamilton wanted to turn the country into an efficient global competitor. As he would argue before Congress in his famous 1791 “Report on Manufactures” (which was far less successful than his funding plan but just as eager to stun all comers with its depth of research on hemp, nails, hats—wool hats, fur hats, and also fur-and-wool hats—and so on), labor power should not be dissipated in small, generalist farms and one-man artisan shops but efficiently marshaled, stabilized, and deployed on commercial farms and in factory towns like the one he founded in Paterson, New Jersey. And of course he wanted to use federal power to achieve that national vision.

The effect of the whiskey tax was precisely to render American distilling efficient through consolidation bordering on cartelization: even as the tax threatened to ruin small producers, Hamilton busily restructured army buying practices to make it impossible for small distillers to sell to army commissaries. In western Pennsylvania, where small distillers had managed to gain an economic toehold, Hamilton went even further: he made the region’s richest, largest-scale distiller the federal tax collector. Paid both a federal salary and a commission on what he took from his less successful neighbors, and charged with enforcing the federal tax that directly benefited his business, this distiller/collector had close relatives—again, federally commissioned, correspondents of both Hamilton and Washington—in the commissary office of the local army post. Business was sewn up.

Brooks routinely characterizes Hamilton’s use of federal power as intended to spur competition and furnish opportunity. But the control of business near the Ohio headwaters by a government-connected family and its pals was a direct consequence of Hamilton’s policy, and it was anything but unintended. “Government is really bad at rigging or softening competition,” Brooks has written by way of praising Hamilton’s economic policies. Yet the rigging inherent in Hamilton’s tax aggravated ordinary people’s existing problems. Farmers and artisans who were losing their weak grip on economic well-being and falling into foreclosure, as federally connected commercial farmers, Eastern real-estate speculators, and entrepreneurs in brick, glass, iron, and other rising industries—the sort Hamilton always said he wanted to promote—bought up more and more of the best Western land. Descendants of the pioneers who had cleared the land found themselves working as day laborers in the factories of their creditors, which was anything but a bleak outcome by Hamilton’s reckoning.

Thus did the first federal domestic tax—linchpin to Hamilton’s finance plan, culmination of nationalists’ decade-long efforts to unite the country, first step in making the American economy a global competitor—operate regressively, comprehensively, and deliberately. Its avowed purpose of wealth concentration and industry consolidation was intended to restructure the country along the “modern American” lines now hymned by so many neo-Hamiltonians. Such extreme and systemic results can’t be what Jason Bordoff and others at the Hamilton Project mean to support by invoking Hamilton’s legacy. But it is what Morris meant by opening the people’s purses, and it’s what Congress made law, at Hamilton’s behest, in 1791.

In his June 8 column, Brooks pits his “Hamiltonians” against modern populists who want, he says, to “fundamentally rewrite the rules” and obstruct policies they see as benefiting only the rich. He would brand as “populists” the many former foot soldiers of the Revolution who rose up against the whiskey tax—the so-called whiskey rebels. To them, American independence now seemed to have been gained for the exclusive benefit of a military-industrial cartel run by and for the privileged and staffed by the well-connected. Western Pennsylvania populists wanted a fair shot at “modern America” too. They wanted access to cash and credit. They wanted to grow their businesses. They were not anti-tax. They were against taxes that straitjacket markets, restrict opportunity, reduce competition, punish small operators, cripple local economies, and offer government cronies bonanzas at the direct expense of other citizens. Most important, they were against what they called taxes that don’t operate “in proportion to property.”

At least that’s what they said they were against, in published resolutions, letters, and petitions. Brookhiser and Chernow caricature them as drunk hillbillies (Brookhiser) whom scholars study merely because they are “colorful” (Chernow). But the essential fact remains that, during the nation’s formative years, the explicit idea that an essential promise of republican democracy lies in fostering opportunities for economic advancement and upward mobility is found not in Hamilton’s funding plan, but in the resolutions of the ordinary people who became whiskey rebels.

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So how have neo-Hamiltonians managed to remake Hamilton in their own image, diminishing his outrageous charisma and ruthless political intelligence in the process?

One way today’s Hamiltonians connect their hero’s economics to the American Dream is through the needle’s eye of his disadvantaged background and remarkable success. “Hamilton came from nothing,” Brooks wrote in his New York Times Magazine piece, “and spent his political career trying to create a world in which as many people as possible could replicate his amazing success.” Or, as one of the PBS talking heads informs viewers, Hamilton believed that “if you worked hard, you should get ahead.”

It’s more likely that Hamilton believed exceptional, bright boys like him should erupt like meteors across the night sky. Blending creative genius with an almost mad degree of thoroughness and tenacity, he strove to dominate everyone he encountered, a quality that brought enormous success but also marred his life and may have shortened it. The idea that Hamilton spent his career trying to create conditions for replicating such a rise seems fantastic. One searches his letters and public statements in vain for thoughtful reflection on ordinary families’ economic struggles or respect for their goals and hopes for their children’s betterment. He is unconcerned about using government power to encourage the rise of laborer’s descendants and would not have related upward mobility to democracy—a dirty word to Hamilton.

Brooks cites remarks from “Report on Manufactures” as evidence of Hamilton’s hope that people would advance socially by moving from agrarian scatteredness to industrial centralization. “When all the different kinds of industry obtain in a community,” Hamilton argued, “each individual can find his proper element.” He also defined as a goal of industrial policy “to cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise.” Where many founders were farmers and planters, Hamilton (like Franklin and Samuel Adams) was an urbanite, and he made an appealing case for the creative synergy to be found in cities. He certainly wanted people “mobile” enough to get off the farm, out of the artisan shop, and into the mill, and he had a forward-looking fondness, at once emotional and practical, of encouraging meritocracy over aristocracy in responsible government positions.

But it is a feat of intellectual acrobatics to ascribe to Hamilton, on the basis of these remarks, a broad policy of encouraging, much less sustaining, widespread upward social mobility through hard work among succeeding American generations. For Hamilton, the “hard work/get ahead” equation, which revivalists want to call a democratic legacy, applied only to the sort of people he deemed it wise to encourage. He had cogent national and financial reasons for carefully dismantling the few ways—which already involved manufacturing and selling—that people had of “getting ahead.” They involved consolidating land, money, opportunity, and power in the West, while obstructing both mobility and democracy. He was explicit about this.

Chernow, straining to detect Hamilton’s sympathy for the impossible difficulties faced by the debtor class, misreads a minor Federalist essay, number six. He suggests that Hamilton felt sorry for Daniel Shays, leader of a 1787 debtor uprising in Massachusetts, arguing that federal assumption of state debts was intended to relieve small-farming debtors. While it’s true that Hamilton objected to vacillations from leniency to aggressiveness in Massachusetts finance policy, his essay as a whole makes clear his disdain for the vaunting ambition and criminal tendencies of all such as Shays, on whom he lays personal blame for the anti-creditor movement sweeping the western part of the country, the real basis and wide scope of which Hamilton always impatiently declined to acknowledge.

To the extent that he thought about it at all, Hamilton wanted people to stop talking nonsense about their own economic aspirations and get ahead his way and his way alone, by becoming efficiently organized laborers and farm workers for the financiers and industrialists. If people wouldn’t do that, he’d make them.

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Wanting to get ahead in their own ways, and seeing Hamilton’s economic policy menacing the unalienable right to the political and economic participation they’d suffered for, the whiskey rebels crossed the line and became criminals. Hamilton crossed the line too, and with a vengeance, when he engaged yet again in what some might prefer to write off as a youthful fling with militarism at Newburgh.

The rebels, fatally romanticized by both progressive and libertarian historians, were militarists too. They tortured and terrorized officials and civilians, took over militias and courts in western Pennsylvania, marched against soldiers of the U.S. Army, came close to burning Pittsburgh, purged the region of wealthy citizens, and threatened the union with secession. What is salient here, however, is how Hamilton chose to interpret those threats and frame the government’s response. Long before the rebels took military action, Hamilton was eager to define what were only a few, scattered crimes as acts of war. He pressured Washington to subdue, police, and occupy the entire area with overwhelming force. Frustrated by cabinet moderates’ insistence on due process, as set in out the Bill of Rights, Hamilton worked with allies in the attorney general’s office to serve summonses that he knew would fan the flames of rebellion, overriding new rules by which Congress was trying to remove inflammatory provisions.

When matters reached a fevered pitch in the summer of 1794, Attorney General William Bradford engaged in sham negotiations with the rebels to buy time for a secret military buildup run by Hamilton, who had eagerly volunteered to lead the mission. To give the impression that the government sought a peaceful resolution to the conflict, Hamilton told Henry Lee, governor of Virginia, to postdate orders calling out the Virginia militia. When the buildup was complete, Hamilton took command of a 20,000-troop operation. His letters to Washington managing that sleight-of-hand (he’d been confirmed by the Senate to manage the Treasury Department, not to wage war or police the citizenry) make fascinating reading. Washington wisely led the troops only part of the way, then turned back, leaving the dirty work to Hamilton.

Citizens throughout Western Pennsylvania were subjected to door-kicking mass arrest and round-up, at Hamilton’s behest, on what he knew—even, at times, said—was no evidence. The writ of habeas corpus was not suspended, as required in such cases by the Constitution, yet men were detained by the hundreds without charge and for indefinite periods. They were also threatened with worse punishment, at times personally by Hamilton, in an effort to extract false testimony against other rebel citizens. The judicial branch was explicitly subordinated to military authority, and the federal judge who accompanied the troops said later that despite insufficient evidence, he’d feared for his own safety at the hands of the troops should he fail to charge at least some of the detainees.

The fact that juries convicted almost none of the men who were marched across the mountains to Philadelphia in the middle of winter (some of whom hadn’t even been charged) and then left for months in jail awaiting trial, has been taken—by cockeyed optimists—as a victory for the jury system. That reading ignores Hamilton’s stated goals, which had nothing to do with trying legal cases and achieving convictions. His letters to Washington, who grumbled about Hamilton’s failure to capture legitimate suspects, are a primer in goal-shifting. Having at first assured Washington that the adventure was worth undertaking because many such suspects would be captured, Hamilton airily dismissed the issue when they weren’t, and refocused Washington’s attention on the necessity of leaving an occupying force in the region to prevent further outbreaks. That occupation subjected law-abiding citizens, who had already been terrorized by the rebels, to martial law; as their scarce food and supplies were impressed, soldiers went from house to house administering loyalty oaths.

Contemporary accounts and affidavits make clear that some of the testimony Hamilton tried to extract from detainees was intended for use not against the rebels, but against Hamilton’s political enemies William Findley and Albert Gallatin, elected representatives who acted as moderating influences—at great personal risk—during the rebellion. Hamilton hoped to use the false evidence to silence his political opponents by hanging them for treason

Unleashed, the existential hero was in a white heat. Using the military to trounce the rule of law and violate civil rights was integral to his vision of federal power, national wealth, and a strong union.

The historian Joseph Ellis, in Founding Brothers, is one of the few recent popular writers on the founding period who take a clear-eyed look at the latter phase of Hamilton’s career, which began with suppressing western Pennsylvania. He cites the all-important source Richard Kohn, concluding that Hamilton’s success in the Whiskey Rebellion inspired an almost obsessive military focus as he grew older. Out of office, Hamilton continued to order around his hacks in the Adams cabinet (or as the PBS biography puts it, he “advised” them), hoping to contrive an all-out war with France. Hamilton also envisioned leading the U.S. army into Spanish Florida, then continuing into Central and South America. He also suggested that the federal government should put the entire state of Virginia “to the test” militarily, something his fans write off as mere venting and posturing, but which Ellis takes seriously.

Hamilton is routinely credited as favoring a strong executive branch. What he really favored, from Newburgh through the Whiskey Rebellion, from the quasi-war with France through his response to the anti-federalism of the Kentucky and Virginia resolutions, was an executive branch run by him, strong enough to do anything it deemed in the national interest. For Hamilton, personal and military force, unrestrained by the slightest consideration of law, were joined ineluctably to American wealth, American unity, and America modernity.

 

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1 Comment

  1. If you’ve never read any L. Neil Smith books, you might enjoy them. I’d particularly recommend The Probability Brooch, The Nagasaki Vector or The Gallatin Divergence.

    http://en.wikipedia.org/wiki/L._Neil_Smith


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