Alexander Hamilton may have been
the United States’ first big time political operative. Hamilton sought his fortune in the corridors
and the backrooms of power. He cozied up
to President Washington, the most powerful man in America and ingratiated
himself with the financial elites of New York and Philadelphia.
Hamilton used his office as
Treasurer to direct largesse to his powerful big city friends. One of his first initiatives was to pay of
the States’ War debts using Federal funds.
Many Revolutionary War veterans
were holding state war bonds that were virtually worthless. They saw no prospect of ever being paid. As Secretary of the Treasury, Hamilton put
forward a plan whereby the Federal government would buy these state bonds at
full face value.
His plan had two moral
failings. The first was that he gave his
wealthy friends inside information on the plan so that they purchased the debt
from the poor vets at pennies on the dollar and then reaped a windfall when the
Feds paid them off in full. The second
was that that the Southern states had already paid their war debts. Therefore the Southerners wound up
shouldering a big chunk of the Northeast’s obligations. The first bail out.
Hamilton financed this boondoggle
for his cronies by putting an excise tax on the sale of whiskey. Hardscrabble backwoods farmers made whiskey
from their unsold grain as a means of preserving its utility rather than seeing
it rot. This sparked an uprising known
as the Whiskey Rebellion. Enraged local
farmers refused to pay this unfair tax.
President Washington dispatched over 12,000 troops to western
Pennsylvania, under the command of Hamilton, to suppress this uprising for the
benefit of his cronies.
Hamilton also successfully
established the first
American central bank which was both unconstitutional and a source of ready
money for the Eastern financiers. He
also advocated for a British style mercantile economy whereby politically
connected merchants would receive subsidies and grants of monopoly privilege
from the Federal government. This was
the exact system that Adam Smith denounced in The Wealth of Nations.
Being a political man, his policies
produced no wealth. He only moved the
rightful property of others to favored friends.
By contrast, Thomas Jefferson was a
producer. He ran a working plantation
which grew crops for trade as well domestic essentials such as meat and
vegetables for consumption. Other homespun
enterprises included a blacksmith shop a carpentry operation as well as
manufacturing facilities for textiles and nails. He was an architect, scientist, designer,
philosopher and writer.
As a disciple of John Locke,
Jefferson believed in the sovereignty of the individual and envisioned a
government whose functions would be limited to protecting and upholding each
individual’s God-given natural rights.
If Jefferson was the prototypical libertarian,
Hamilton may be regarded as the archetypal fascist, advancing an unholy
entanglement of state and private interests.
In fact, his Federalist Party went so far as to enact the Sedition
Act that made dissent with their policies illegal.
And herein lays the problem. Many modern writers hold up Hamilton as the
father of American capitalism and he was nothing of the sort. They mistake his brand cronyism as the model
for capitalist enterprise and rightfully turn away in disgust. This was the beef of the Occupy movement as
well as Tea Party populists.
Jefferson, on the other hand, was
guilty of the most heinous hypocrisy.
While he and other like minded Southerners advanced the causes of
individual self determination, limited government and states’ rights, they also
held slaves. Civil rights charlatans can
now cast words like “liberty”, “states’ rights” and “limited government” as
codes for rolling back the protections that they believe shelter them from
racial assaults.
Sadly, because of the Hamiltonian
tradition, most people misunderstand true free markets capitalism. To them Capitalism is a dirty word, an
insider’s game that is rigged so that all fail except for the privileged
few. Likewise, libertarian arguments for
limited government are oft perceived as thinly veiled racism. Minorities and their friends have mistakenly
come to view government as their protector rather than the plunderer that it
is.
It is incumbent upon activists in
the liberty movement to address these misconceptions, to debunk crony
capitalism and to reach out beyond our white male core if we are ever to arrest
the statist onslaught, let alone see liberty in our time.
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Half the people are drowned and the other half are swimming in the wrong direction."
- Paul Simon
Half the people are drowned and the other half are swimming in the wrong direction."
- Paul Simon
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