“It is good to meet and drink at the fountains of wisdom inherited from the Founding Fathers of the republic,” noted President Warren G. Harding. Vice President JD Vance recently stated that conservatism would be better served with less Milton Friedman and more Alexander Hamilton when it comes to economic policy. This is not the first time that Vice President Vance has upset the free-market wing of the conservative movement.
Vance’s recommendation that conservatives turn to Hamilton is creating even more agitation. Free-market conservatives are renewing their argument that Thomas Jefferson is the rightful example for conservatives to follow.
The argument is that Jefferson was a champion of limited government and federalism, while Hamilton supported a larger federal government that laid the foundation for the New Deal. Certainly, it is true that Jefferson advocated a much more limited government than Hamilton, but the assertion that Hamilton was the forerunner of today’s expansive federal government should be dismissed.
Free-market conservatives often forget that Jefferson, along with Andrew Jackson, was a longtime hero of Democrats, including President Franklin D. Roosevelt. Republicans, by contrast, once honored Hamilton. “Hamilton Clubs” were popular among Republicans, and he was widely celebrated within the Grand Old Party. Numerous Republicans wrote books and gave speeches honoring his legacy. Perhaps most notable was the admiration shown by the conservative Presidents Warren G. Harding and Calvin Coolidge.
Hamilton, who served as Secretary of the Treasury under President George Washington, was instrumental in establishing the modern system of American capitalism. A leading member of the Federalist Party, Hamilton was an influential adviser to President Washington and helped shape the constitutional vision later advanced by Chief Justice John Marshall.
Hamilton was considered the “chief architect of the Washington administration’s policies.” Forrest McDonald, who was a leading historian of the American Founding and a biographer of Hamilton, argued that “Hamilton’s fiscal system, which breathed life into the Constitution, was an example of conservatism — of constructive, prudential change — at its best.” Hamilton’s policies included paying down Revolutionary War debts, establishing the first Bank of the United States, and creating a system of tariffs.
Hamilton’s economic program placed the nation on a path toward a sound economy. His policies were later continued and championed by the Whig Party under the leadership of Henry Clay of Kentucky and Daniel Webster of Massachusetts. Both Clay and Webster promoted the American System, a program of economic nationalism that reflected Hamilton’s vision of economic development.
As Treasury Secretary, Hamilton also delivered a number of reports to Congress, most notably his Report on Manufactures. Hamilton understood the need not only for a strong economy and financial system, but also that the nation could not be dependent upon foreign powers. This is one reason why his program also included the use of tariffs.
“Hamilton’s report would become our blueprint of economic independence,” wrote Patrick J. Buchanan. President Calvin Coolidge wrote that Hamilton “desired his country to be self-sustaining and self-sufficient.”
“Conservative statesman from Alexander Hamilton to Ronald Reagan sometimes supported protectionism and at other times they leaned toward lowering barriers. But they always understood that trade policy was merely a tool for building a strong and independent country with a prosperous middle class,” wrote Ambassador Robert Lighthizer, who served as United States Trade Representative in President Donald Trump’s first administration.
What would Hamilton think of our dependence today on foreign nations, even hostile nations such as China, for necessities? Over time, the United States has outsourced much of its manufacturing base in pursuit of free trade and globalization. COVID demonstrated that the nation had outsourced too much, including crucial medical and pharmaceutical supplies.
“The party now in power in this country, through its present declaration of principles, through the traditions which it inherited from its predecessors, the Federalists and the Whigs, through their achievements and through its own, is representative of those policies which were adopted under the lead of Alexander Hamilton,” stated Coolidge.
Andrew Mellon, who served as Secretary of the Treasury in the administrations of Presidents Harding, Coolidge, and Herbert Hoover, was also influenced by Hamilton. Mellon was likewise described as the greatest Treasury Secretary since Hamilton.
“Alexander Hamilton, whose genius was responsible for the establishment of our financial system, early committed this Government to a policy of debt payment and keeping expenditures within income,” wrote Mellon.
It was these principles that drove both the Harding and Coolidge administrations. Reducing government spending, lowering tax rates, and paying down the national debt were all important policies of the 1920s that led to substantial economic growth. This also included a policy of protectionism. On the issues of spending, taxation, debt, and trade, Harding and Coolidge followed a conservative Hamiltonian approach.
Finally, Hamilton’s philosophy was not the beginning of modern liberalism or progressivism. As Michael P. Federici wrote in The Political Philosophy of Alexander Hamilton:
Hamilton was not a libertarian, but he was not an advocate of the managerial state either. His view of human nature would not have allowed either the faith in economic anarchy suggested by libertarians or the heavily regulated state advocated by Keynesians. Hamilton’s policies lack enough of the Gnostic flavor of Jacobinism or Progressivism to consider his political economy an antecedent to modern American liberalism. They were not designed or intended to eradicate poverty, fear, want, as FDR’s New Deal was designed to do, and they did not aim to dramatically change the scope of government’s role in individual lives. Hamilton’s objections were far more modest.
Federici argues that “Hamilton’s political economy becomes sober to the point of being incompatible with later ideologies and developments in American history, like the New Deal, the welfare state, and the managerial state.”
“Above all, Hamilton understood the powers of government to be limited—not only by the written law of the Constitution, but also by the natural rights affirmed by the consensus of the Founding generation. Hamilton favored an activist federal government, but he did so on grounds and within limits that are recognizably part of the American conservative and constitutional tradition,” wrote Carson Holloway, a Professor of Political Science at the University of Nebraska Omaha.
Conservatives often champion Jefferson as a hero, but Hamilton provides the better example of a prudent conservative statesman. Coolidge was correct when he wrote “when America ceases to remember his greatness, America will no longer be great.”
Print a PDF