Belmont Club

The Hamilton Edict

What’s old is new. Walter Russell Mead describes the current world and financial crisis in terms of the unsettled debate between Alexander Hamilton and the Jeffersonians.

If you asked Theodore Roosevelt what kind of Republican he was, he would — and did — tell you that he was a proud standard bearer of the Hamiltonian tradition in American politics.

Ron Paul, who would have fought TR tooth and nail as much as he is currently fighting both President Obama and ex-Speaker Newt would agree. Gingrich, Obama and TR are all Hamiltonians, and Ron Paul thinks they are all dead wrong.

As we gear up for 2012 and beyond, American attention is increasingly returning to the oldest battle in our political history: the battle between the Hamiltonians and Jeffersonians that split George Washington’s cabinet down the middle and established our first party system.

That fight was essentially over three things that divide us intensely today: the role of the federal government, the nature of the credit system, and the future of the social hierarchy. Alexander Hamilton favored a strong federal government at home and abroad, a centralized credit system similar to the British one with a Bank of the United States acting as our central bank, and believed that the best educated and most widely experienced people in the United States constituted a natural aristocracy and should play the leading role in our politics.

Then as now, the dispute was not over policy but over “who decides”.

Mead fills us in on the background.

Jefferson who had played a key role in fighting for independence against the greatest monarchy on earth, was intensely afraid of its return in another guise. Mead writes that Jefferson “wanted a weak federal government, detested Hamilton’s banking system, and feared that the alliance of a social elite with a powerful government and a strong central bank would turn the US into a European-style aristocratic or monarchical society.”

But this revolutionary purity was increasingly difficult to maintain as the fledgling United States grew into great power. Power proved to be a radioactive element whose presence drew politicians into it like moths to a flame. It provided the foundation for a great city to rise on the banks of the Potomac.

The factors are familiar to everyone. “The rise of an interconnected national economy… the rise of large fortunes”, in other words all the elements of new and dominant elite.  Foreign affairs inevitably played a part. America rose to global domination as a result of World War 2. All this power, intentionally or accidentally accumulated, created challenges which both the Republicans and Democrats found convenient to solve by centralized policy making and administration.

Thus, during the Cold War the conservatives wanted a strong central government to fight off the Soviet threat. Over the same period Lyndon Johnson found that the Federal government was a tremendously powerful political tool for rearranging the political landscape and created a whole class of voters dependent upon Washington for support.

Although they may have disagreed on everything else, bot the Republicans and Democrats agreed on one thing: they needed to be in charge to put the world to rights.

The result was, as Mead writes, that “while the 20th century was in some ways a very democratic one … it was also an unusually hierarchical period by American standards.” Both parties, though divided along notionally ideological lines had converged in the one aspect that mattered most. They had settled the long running debate between Hamilton and Jefferson in favor of Hamilton.

The 20th century was more elitist than the 19th; while access to the educational and social elite was open to talented outsiders, more and more power flowed to “experts” …

The Kennedy-Johnson administrations saw the peak of this Hamiltonian era. The son of a plutocrat summoned the “best and the brightest” from Harvard to carry out an ambitious program of national and international change. From the Alliance for Progress abroad to the War on Poverty at home to the Apollo space program aimed at reaching the moon, the Democratic administrations between 1961 and 1969 brought all the elements of 2oth century Hamiltonian America onto the stage.

Jefferson, had he lived, would doubtless have observed that the British had come again, not in the shape of Redcoats, but in the figure of John Maynard Keynes who provided the key missing element of aristocratic rule: money. “Keynesian economics was a cornerstone of the new Hamiltonian vision. Keynes is Hamilton on steroids. Hamilton (like the British visionaries who built the Bank of England on which he modeled his Bank of the United States) believed that a well-managed federal debt was a national blessing, not a national curse.”

With a powerful central bank, the Hamiltonian triumph was complete. Now not only was there an elite, but they could deficit spend their way into ever increasing their stature and power. If ever there was a more complete case of historical triumph of one point of view over the other, it would be hard to find one greater than Hamilton dancing the fandango over the grave of Jefferson’s intellectual legacy.

But there was one problem. It didn’t work. If the phrase the “best and brightest” represented the return of elite rule,  it would be forever associated with that very same elite’s dysfunctional strategy in Vietnam.  It is ironic that the left, which never tired of explaining why the “best and the brightest” would fail in Southeast Asia, never understood that the same might apply to Detroit.

The blue social model, the progressive American system of the 20th century …  has brought many benefits. … But there is also no doubt that the Hamiltonian-social democratic synthesis of the twentieth century is not adequate for the times in which we live. Corporatism has bred the kind of cronyism and corruption Jeffersonians have always feared. The alliance of the wealthy and the elite with strong state power is creating class divisions and class conflict. The remoteness of the federal government from popular control (to be one of 300 million citizens is to have no effective control over the governing power) threatens to hollow out Americans’ sense of self reliance and independence while keeping most people at a great remove from any real exercise of political power.

In that one paragraph of monumental understatement, Walter Russell Mead summarizes the mess America is in. The gigantic deficit; paralytic goverment;  identity politics; economic uncompetitiveness; and the elevation of incompetents to heights or ridiculous power. He goes on.

Some of the problems we face are due to essential defects in Hamiltonianism, against which a Jeffersonian revival is our only safety. The unchecked Hamiltonian ascendancy of the twentieth century has led to a lopsided America. A revival of the Jeffersonian element in American political thought and practice is essential to our national health.

The current crop of candidates, he argues, represents the return of the leading edge of Jeffersoniansim in the mainstream political fray. He examines each of the current Presidential candidates through this prism.

President Obama will run for re-election as a Hamiltonian and a custodian of the 20th century progressive state. … Governor Romney, so far as one can discern, is at his core a Hamiltonian as well, but he has less sympathy than President Obama and the Democrats for the blue synthesis of Hamiltonianism and social democracy …

Former Speaker Gingrich is also a Hamiltonian, but much more than either Romney or Obama he believes that Hamiltonianism needs to be re-imagined for our times. Congressman Paul is the one Jeffersonian in the race, and of the four he seems the least likely to be elected in 2012.

What America needs is a debate between 21st century Hamiltonians and Jeffersonians. Obama and Paul in their way are both looking backward; Gingrich feels the need for a deep reworking of the Hamiltonian tradition and his surprising surge in the polls suggests that he has touched a nerve in the public — despite the baggage of his past and the sometimes sketchy nature of his proposals.

If there is any fault to be found in Mead’s excellent article it is that he was too modest to fully generalize the results of his argument. Jefferson never saw his vision of America as entirely parochial. It was at heart a universal vision. Events in Europe and even Arabia suggest that Jefferson was right in this matter too.

Not only has the centralized power model failed in the United States, it has run into serious trouble everywhere. The European Union, for example, can be regarded as an effort to recreate the United States from entirely elitist principles, a kind of hold-my-beer demonstration by European elites that a pyramid can be constructed on its apex. In fact as Nigel Farage points out, none of the EU leadership is elected at all. Why should they be?

And yet while Europe has as separate an history from the United States as the Atlantic ocean will allow, the EU is in many ways facing identical crisis as if, despite all the differences, some general principle were at work.  If this is the case, then same eternal questions are now being asked of Facebook generation as were put to those who corresponded by quill, paper and letter. It is not entirely farfetched to ask if history is not going through some kind of analogous development in which the most interesting question is whether the 1789 of the 21st century will precede it’s 1776.

But speculation will provide no answer beyond that conclusion with Mead has already described. History is on the move again. Jefferson’s ghost was not quite as securely interred as his rivals may have imagined. And the rematch of the ages, the ultimate grudge fight of political history is underway. Will we be up to the challenge? Maybe if Jefferson were alive today he might ask of us, “Why not? What did they have that you ain’t got?” Indeed. Every generation in an existential challenge has both everything and nothing to lose.


Storming the Castle at Amazon Kindle for $3.99
No Way In at Amazon Kindle $3.99, print $9.99
Tip Jar or Subscribe for $5