The Real Alexander Hamilton

"Hamilton popularized... protectionism, arguing that young industries needed to be protected from competition. Well, it turns out that industrial infants never grow up. ... In keeping with the Republican Party’s big-government roots, one of the first things President George W. Bush did upon taking office... was to place 50 percent tariffs on steel, which he apparently believed had not yet grown up." [Note: This, of course, raised the price of every product containing steel. ~~ SR]

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by Thomas J. DiLorenzo | May 14, 2004

Rousseau’s wish to free the current majority from all restrictions, to dissolve the people into a homogeneous mass, abolish decentralization, and remove representative institutions could not be in sharper contrast to American traditions of constitutionalism, federalism, localism, and representation.
~ Claes G. Ryn, America the Virtuous, p. 73

In his important book, America the Virtuous, Professor Claes Ryn of Catholic University makes the compelling case that Rousseau is the ideological inspiration for the neoconservative movement, which he calls the new Jacobinism. Rousseau conjectured that some nebulous "general will" of the people was always right, and therefore government should have absolute power over a highly centralized and militarized state, all in the name of promoting if not imposing "democracy."

It is not at all surprising, then, that another of the neocons’ American idols is Alexander Hamilton, whom historian Cecelia Kenyon [1922-1990] labeled "the Rousseau of the Right" (Cecelia Kenyon, "Alexander Hamilton, Rousseau of the Right," Political Science Quarterly, June 1958, pp. 161–178). The neocon love affair with "the Rousseau of the Right" was on display recently in a Sunday, April 25 New York Times book review of a new biography of Hamilton (Alexander Hamilton, by Ron Chernow) by Times op-ed columnist and house neocon David Brooks. Brooks is just wild about Hamilton, crediting him with nothing less than "creating capitalism." (He also seems gratified that the Chernow book supposedly does a "devastating destruction job on Thomas Jefferson").

Now, Alexander Hamilton can and should be admired for many things. But the one thing that Brooks says was his "greatest achievement"– his role as Treasury Secretary – should not be. Hamilton was a mercantilist. This was the corrupt system of political patronage and special privilege held into place by economic superstition in the Europe of Hamilton’s day (and before). As such, he championed protectionism, corporate welfare, central banking, excessive excise and property taxation, and government debt. Adam Smith’s Wealth of Nations was a critique and repudiation of mercantilism and a defense of capitalism. Brooks and Chernow have it all backwards when they write that these policies were capitalistic. In fact, they were just the opposite.

As Larry Schweikart writes in The Entrepreneurial Adventure: A History of Business in the United States (p. 63), Hamilton’s central bank, the Bank of the United States (BUS) "brought out the mercantilist Hamilton" and "fit perfectly with the mercantilist view of using business in the service of government." (This was also the view of the Italian and German governments during the 1920s and ‘30s). The BUS was thankfully disbanded by President Andrew Jackson after several decades of corruption, inflation, and political mischief making. It did serve, nevertheless, as a precursor of the Fed.

Far from being a champion of capitalism, Hamilton was a champion of... Keep reading>>>>