As President Obama travels to John Brown’s old stomping ground in Osawatomie, Kansas where Theodore Roosevelt made his New Nationalism speech in 1910, Newt Gingrich has announced that he is a Theodore Roosevelt Republican.
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.
Thomas Jefferson disagreed with virtually everything Hamilton believed. He 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.
Bipartisan Establishment, meet Mr. Tea Party.
The disagreement between these two men continued to reverberate down the years. John Quincy Adams, Nicholas Biddle, Henry Clay, Daniel Webster and Abraham Lincoln sided with Hamilton up through the Civil War. Presidents Madison and Monroe followed Jefferson, more or less; so in his own irascible way did Andrew Jackson. The Southern Confederacy tried to write Hamilton out of the constitution when it modified the Philadelphia document to serve the rebel government.
Alexander Hamilton owned the 20th century. America’s growing global role made his vision of a strong military look like simple common sense; as US corporations became more globally focused and responsibility for the international financial order shifted from Britain to the US, his support for a strong federal role in promoting US economic interests around the world grew much less controversial.
While the 20th century was in some ways a very democratic one, with both women and racial minorities gaining the vote, it was also an unusually hierarchical period by American standards. 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”.
This was partly because the United States shifted from being a nation of small farmers, beholden to no one, to a nation of employees living in cities and suburbs. The administration and management of a large urban unit requires a larger and more powerful government than does a region of small farmers and rural communities. The rise of an interconnected national economy made the federal government’s power to control interstate commerce relatively more important; in the age of the automobile and even more in the information economy, more and more commerce is interstate, less and less purely local.
The rise of large fortunes also helped. The Ford Foundation and other large philanthropic organizations employed, empowered and deployed experts to solve social problems. The experts followed the doctrines of the new social sciences, believed at the time to be a source of objective wisdom.
This brief list only scratches the surface of the forces that made 20th century America what it was, but put these and other trends together, and the 2oth century saw the steady eclipse of the agrarian and Jeffersonian American vision by the urban, commercial and hierarchical Hamiltonian ideal.
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.
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. Keynes made the same argument about deficits that Anglo-American thinkers had long made about government debt: an appropriate and well-managed government deficit could be an engine of economic growth. And if Hamilton believed that the central bank could manage debt effectively in a world of specie-backed currency, Keynes argued that central banks and even a global central bank could manage debt and deficits in a world of paper or fiat money.
The Hamiltonian vision was further reinforced by Theodore Roosevelt’s vision of government as the protector of the little man against the unchecked power of large corporations. Jeffersonians had classically worried that the federal government was the leviathan that, unchecked, could destroy American freedom. Rooseveltian progressive Hamiltonians saw the federal government as the park ranger, protecting the tourists and ordinary citizens from the corporate velociraptors in the Jurassic Park of modern American life. The stronger the ranger, the safer the people.
Big Tent Hamiltonianism
The blue social model, the progressive American system of the 20th century, was the love child of Hamiltonian liberal theory and social democratic aspirations rooted in the Industrial Revolution and the class struggle it spawned. It used a capitalist state, and capital markets, to advance both classic Hamiltonian objectives and the social goals of the urban working class. For a good chunk of the twentieth century, the American party system reflected this division: Rockefeller Republicans stressed the liberal and Hamiltonian roots of the system, liberal Democrats stressed the social democratic aspects of its agenda.
In addition to the large social and cultural forces that made 20th century America so hospitable to the Hamiltonian vision, there was a very specific political switch. During the New Deal, the South rediscovered the virtues of an economically active national government. George Washington (who decisively favored Alexander Hamilton in his arguments with Thomas Jefferson), John Marshall, Henry Clay and even the young, nationalist John Calhoun had all seen the virtues of a national government acting to promote state development. But as the Hamiltonian cause in the early republic became linked to a high tariff, pro-manufacturing stance, and as southern slaveholders came to favor constitutional theories that limited the power of the federal government to interfere in the South’s “peculiar institution”, the South threw itself squarely into the Jeffersonian camp.
After the Civil War, the control of the federal government by Hamiltonian, high-tariff business interests, tribal loyalty to the Democratic Party, and the war-hallowed cause of states’ rights, plus fear that a strong federal government would meddle in southern racial policies reinforced Dixie’s attachment to Jeffersonian views.
That began to change in the New Deal. Lyndon Johnson typified the new kind of southern politician who understood that federal spending on infrastructure, electricity generation, and agricultural subsidies could transform the South. Right up through the War on Poverty — which developed formulae for federal funding that gave the greatest federal support to the poorest states (almost all southern) — a strong federal government, once the bane and the nightmare of the South, became its strongest ally in Dixie’s attempt to close the development gap with the North.
America’s rise to world power further improved the position of Hamiltonians at home. The transfer of financial power from London to New York and the liberation of the financial system from the gold standard allowed American Hamiltonians to reconcile their own preference for sound, internationally convertible money and the interests of capital-hungry entrepreneurs and farmers. Under American leadership the global monetary system became far more expansionary than in the British era, and the sharp contrast between Hamiltonian banking interests supporting tight money against populists clamoring for debt relief was blurred in post World War Two America.
As the US shifted from a trade policy based on being a free rider in the global British trading system to being the organizing power in the postwar system of free trade, Hamiltonianism also shed its support of protective tariffs and embraced the cause of free trade. Hamiltonian tariff and tight money policy had set farmers’ teeth on edge from the earliest days of the Republic; 20th century Hamiltonians shed this political baggage and, with government crop subsidies, the regulation of railroad rates, and infrastructure projects (irrigation, highways) supporting agricultural interests, the increasingly corporatized agricultural interest in the United States moved from the Jeffersonian to the Hamiltonian camp where it remains today.
Wrestling With Founders
The long Hamiltonian ascendancy in the United States has brought many benefits. It is in my judgment neither possible nor desirable to go back to the weak farmer’s republic that Thomas Jefferson thought he was building in the 1790s. At home and abroad a healthy Hamiltonianism is an essential building block of American prosperity and security.
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.
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.
Other problems are due to the need for Hamiltonianism to reform itself: to develop new economic and social approaches for a new era. Hamiltonianism at its best is forward-looking and revolutionary. It is not the tool of established interests but a force for innovation.
Either way, a long revival of American traditions of individualism, skepticism of elites, and distrust of the federal government is a rising force in this country. Add to that suspicions of finance and of the influence of firms like Goldman Sachs in politics, and a full blown Jeffersonian reaction is beginning to emerge.
The decline of the blue social model, part Hamiltonian, part social democratic, is the reality that shapes the debate. Jeffersonians like Ron Paul argue that the decline of the blue model exposes the essential fallacies of Hamiltonian governance and that the US needs to rebase itself on a Jeffersonian foundation. Hostility to the Federal Reserve echoes Jefferson’s hostility to Hamilton’s First Bank of the United States; the desire to limit federal authority and revive states’ rights similarly echoes some of the country’s oldest political arguments.
In Osawatomie and beyond, President Obama will run for re-election as a Hamiltonian and a custodian of the 20th century progressive state. He will argue that modest and careful reforms, trimming a few excesses here, making some innovative policy shifts there, can keep the old ship afloat in the twenty first century. Like JFK, he will argue that the best and brightest can develop government policy that will guide the nation to a brighter future through collective action and state investments.
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. He stands roughly in a line of Republican presidents like Dwight Eisenhower, Richard Nixon and George H. W. Bush who accepted the basic elements of the progressive state. 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. Paul’s popularity also points to the growing public discontent with political approaches centered on the defense of the status quo.
On the whole, 2012 is not shaping up as the kind of epochal contest the country saw in 1912, when Theodore Roosevelt used his Osawotomie speech to launch the Bull Moose Party. The three way contest between Taft, Wilson and Theodore Roosevelt was the first election in which the dominant ideas of the 20th century were on display; we seem to be headed for something more modest this time.
The country needs a livelier and richer debate; over the next few days and weeks at Via Meadia we will do our part by trying to work through some of the ways in which Jeffersonian and Hamiltonian thought offer avenues for renewal and reform here in the twilight of Big Blue.