Posted on 08/05/2010 6:01:30 AM PDT by Michael Zak
Obviously Hamilton understood the relation between the quantity of specie and the health of the domestic economy. His program was designed to bring about the inflow of such through the purchase of US debt. And it worked admirably making US debt as strong as ANY nation’s and stronger than gold itself.
His genius essentially created a money supply by capitalizing the nation’s word. Jefferson/Madison policy would have been a disaster. BUT his policy never was FOCUSED upon specie outflow and never but the policies in place elsewhere to stop it. Concern or “dire warnings” notwithstanding.
Hamilton’s goal was strengthening the Union and making possible the survival of the new nation not refutation of Adam Smith.
Hamilton undertook an extensive and in depth study of the US economy and received reports from all over the nation as a part of that, the first such attempt ever made. Of course, that data was not IN THE REPORT. What a ridiculous idea that would have been.
Treasury records doubtless suffered from having our capital in three different places AND being burned down. But the fact remains that our greatest secretary of the treasury and one of the other greatest, Hamilton and Gallatin were in charge for much of the “dark age” you referenced. It is hardly surprising or scandalous that a new nation would have gaps in its records.
Hong Kong was not a nation but was, as I said, a COLONY. Just as we had COLONIES on our doorstep which Hamilton had to consider indeed we were surrounded by them. France’s plan to send an army to Louisiana was destroyed by the yellow fever which decimated it attempting to put down the slave revolt in Haiti. It was only after that that Napoleon gave up on his intention to re-establish France’s new world empire and decided to dump Louisiana so that the US would have to fight Britain for it not France. We faced a hostile and VERY dynamic world power not like the essentially defense-minded China facing Hong Kong, which was after all Chinese territory.
Since I was born and raised in the South I was educated to believe Jefferson was almost perfect and Hamilton was the Devil’s own hand in American politics. It was only about ten years ago that I decided to look deeply into the era of the Founding.
What I found was that the truth had been turned on its head and that the sins attributed to Hamilton were actually those things necessary to bring this nation to a position of strength and allow its survival. Jefferson’s virtues were wildly overstated and often would have been a disaster if implemented at the beginning. He was as big a fraud and phony as his namesake Billy Jefferson Clinton though a much better furniture maker.
Hamilton favored NO COUNTRY for any reason other than its usefulness to the US. It was HE would warned (through Washington’s lips) about the danger of permanent attachments to any nation.
His “protectionism” was merely an accompaniment unavoidable in a revenue tariff or to build up defense industries.
There was certainly no “provoking” war with France although it did believe our foreign policy should be an adjunct to its own and it attempted to manipulate (with the Democrats help) our policies. Jay’s treaty was a nice “fork you” to the terrorists.
Since I was born and raised in the South I was educated to believe Jefferson was almost perfect and Hamilton was the Devil’s own hand in American politics.
I don't think that's necessarily a southern thing. Hamilton and Jefferson tend to rise and fall in estimation vis-a-vis one another every couple of decades. The trouble with it all is a tendency to instill perceptions of the two as a "saint" or "devil," and fetishize with one while demonizng the other accordingly. Though resist admitting it and may not even realize its extent yourself, your Hamiltonian partisanship takes on an extreme character, as does your Jefferson hatred, both of which are obscuring your ability to conduct measured factual analysis of each man.
It was HE would warned (through Washington’s lips) about the danger of permanent attachments to any nation.
And in doing so Hamilton only demonstrated his duplicitous political tendencies. It would be laughably absurd for the architect of the Jay Treaty to turn around and denounce entangling foreign alliances only a few years later, except that he did just that.
His “protectionism” was merely an accompaniment unavoidable in a revenue tariff or to build up defense industries.
Have you not even bothered to read Hamilton's writings on trade? Or are you simply so smitten by your Hamiltonian man-crush that you cannot recognize its plain text?
Hamilton was a proponent of protectionism FOR explicitly protective purposes - i.e. infant industry and manufacturing development - from around 1779 onward. Yes, his tariffs also generated revenue as most tariffs are prone to do, but their aim was explicitly protective as Hamilton stated in great detail in his Treasury report on Manufactures.
Obviously Hamilton understood the relation between the quantity of specie and the health of the domestic economy.
Obviously he did not. Otherwise he would not have openly espoused policies intended to hoard specie ala mercantilism. As to the "virtue" of debt, just wondering. Have you seen where Hamilton's little "gift" stands today?
Hamilton’s goal was strengthening the Union and making possible the survival of the new nation not refutation of Adam Smith.
Except...
1. His policies did not "strengthen" the nation - they sowed the seeds of sectional discord over the tariff issue, which continued to be a source of irritation for the next 150+ years, and
2. Early drafts of the reports in Tench Coxe's papers conclusively prove that he was indeed going after Smith.
Oh, and there's also this:
3. Even if we assume Hamilton wanted to strengthen the union, protectionism doesn't work so he picked a bad policy to do it.
Hamilton undertook an extensive and in depth study of the US economy and received reports from all over the nation as a part of that, the first such attempt ever made.False. Lord Sheffield, a member of the British Parliament, published the first comprehensive report of the new United States' economy in 1784. It had more statistical data on the state of American commerce on a single attached foldout chart than all of Hamilton's data-void Treasury reports combined.
Of course, that data was not IN THE REPORT. What a ridiculous idea that would have been.Why not include it? Almost all of Hamilton's successors did. In fact, the Treasury Department has published a report on "Commerce and Navigation" detailing every last penny of every last good to clear the American border in every year from 1821 to the present. And they sent them sporadically from 1816-1820. The same type of stats were also kept by Parliament up until 1781, and then by the states that had individual state tariffs under the Articles of Confederation from 1781-1789. That leaves one huge gap from 1790-1820 - the "dark age" of statistical data for the early United States. And it began under Alexander Hamilton.
Besides, if Hamilton collected all the data you claim, then WHERE THE HELL IS IT? Historians would love to get their hands on that sort of thing. And don't give me the old "they were moving capitals" excuse. Tench Coxe's rough drafts of Hamilton's rough draft of the final draft of the Reports on Credit and Manufactures survived all those moves just fine and dandy. So did all the records of Congress.
No, the real answer is we don't have complete data for those years because Hamilton never assembled it. And neither did he make any thorough and grandiose "first-ever" economic analysis of the brand new United States seeing as (1) Sheffield beat him to the punch on that by at least 6 years, and (2) if it was ever done, it is nowhere to be found in any of his published reports and no other record of it exists!
Obviously Hamilton understood the relation between the quantity of specie and the health of the domestic economy.
Obviously he did not. Otherwise he would not have openly espoused policies intended to hoard specie ala mercantilism. As to the "virtue" of debt, just wondering. Have you seen where Hamilton's little "gift" stands today?
Hamilton’s goal was strengthening the Union and making possible the survival of the new nation not refutation of Adam Smith.
Except...
1. His policies did not "strengthen" the nation - they sowed the seeds of sectional discord over the tariff issue, which continued to be a source of irritation for the next 150+ years, and
2. Early drafts of the reports in Tench Coxe's papers conclusively prove that he was indeed going after Smith.
Oh, and there's also this:
3. Even if we assume Hamilton wanted to strengthen the union, protectionism doesn't work so he picked a bad policy to do it.
Hamilton undertook an extensive and in depth study of the US economy and received reports from all over the nation as a part of that, the first such attempt ever made.
False. Lord Sheffield, a member of the British Parliament, published the first comprehensive report of the new United States' economy in 1784. It had more statistical data on the state of American commerce on a single attached foldout chart than all of Hamilton's data-void Treasury reports combined.
Of course, that data was not IN THE REPORT. What a ridiculous idea that would have been.
Why not include it? Almost all of Hamilton's successors did. In fact, the Treasury Department has published a report on "Commerce and Navigation" detailing every last penny of every last good to clear the American border in every year from 1821 to the present. And they sent them sporadically from 1816-1820. The same type of stats were also kept by Parliament up until 1781, and then by the states that had individual state tariffs under the Articles of Confederation from 1781-1789. That leaves one huge gap from 1790-1820 - the "dark age" of statistical data for the early United States. And it began under Alexander Hamilton.
Besides, if Hamilton collected all the data you claim, then WHERE THE HELL IS IT? Historians would love to get their hands on that sort of thing. And don't give me the old "they were moving capitals" excuse. Tench Coxe's rough drafts of Hamilton's rough draft of the final draft of the Reports on Credit and Manufactures survived all those moves just fine and dandy. So did all the records of Congress.
No, the real answer is we don't have complete data for those years because Hamilton never assembled it. And neither did he make any thorough and grandiose "first-ever" economic analysis of the brand new United States seeing as (1) Sheffield beat him to the punch on that by at least 6 years, and (2) if it was ever done, it is nowhere to be found in any of his published reports and no other record of it exists!
Friedman’s opinion does not negate the FACT that Hamilton’s program was designed to fund the government
Except you are stating "FACT," arrogantsob. You are stating your own highly biased and near-delusional idolization of Hamilton as you wish him to be, not as he actually was.
Specifically:
- It is a FACT that Hamilton's "Report on Manufactures" laid out a thorough case and policy prescription for infant industry protectionism, utilizing (1) favorable tariff rates and (2) subsidies or "bounties" to import-competing industries.
- It is a FACT that his tariff was NOT intended to maximize revenue, because it gave favorable protective rates to a select group of manufactured goods that were explicitly intended to discourage the importation of their foreign competitors through a heavier tax rate than most other imports.
-It is a FACT that a true revenue-based tariff system would have imposed a low uniform flat impost rate of about 2% on all goods, essentially making it a "sales tax on imports."
- It is a FACT that James Madison originally proposed that low uniform single-rate tariff inthe first Congress as a competitor bill to Hamilton's graduated protective tariff plan.
- And it is a FACT that all political policy that is economic in nature is also inherently economic policy for self-evident reasons. But it is NOT a fact that Hamilton was simply trying to generate revenue. That is the opposite of a fact, and we know that it is the opposite of a fact because Hamilton himself espoused the use of the tariff system for purposes OTHER THAN revenue.
Jefferson was playing footsie with the most deadly enemy facing the US. Much like if Biden was secretly undermining foreign policy with al Queda
Last I checked, France never landed an attacking army in the United States and much to the contrary, actually gave us troops to expel another army - the British. As in the very same British that invaded us a decade before Hamilton played footsie with them and invaded us again a decade after Hamilton played footsie with them.
In other words, you've got your silly little analogy backwards.
There is NO evidence that Hamilton wanted war with France
Oh really? Then I wonder where this came from...
"If universal empire is still to be the pursuit of France, what can tend to defeat the purpose better than to detach South America from Spain, which is only the channel through which the riches of Mexico and Peru are conveyed to France? The executive ought to be put in a situation to embrace favorable conjunctures for effecting that separation. It is to be regretted that the preparation of an adequate military force does not advance more rapidly. There is some sad nonsense on this subject in some good heads. The reveries of some of the friends of the government are more injurious to it than the attacks of its declared enemies." - Alexander Hamilton, January 26, 1799
"Among other things, it should be agreed what precise force should be created, naval and land, and this proportioned to the state of our finances. It will be ridiculous to raise troops, and immediately after to disband them. Six ships of the line and twenty frigates and sloops of war are desirable. More would not now be comparatively expedient. It is desirable to complete and prepare the land force which has been provided for by law. Besides eventual security against invasion, we ought certainly to look to the possession of the Floridas and Louisiana, and we ought to squint at South America." - Hamilton, June 27, 1799
Not only did he want a war with France and Spain - the CERTAIN result if he carried out his plans for Louisiana and Florida - he was even talking about a future invasion of South America to add to his little empire. And all, of course, to ensure that the little standing army he had conveniently built up for himself "wouldn't go to waste."
And that is why Adams was speaking truthfully when he called Hamilton mad.
The Jay Treaty was in no way an “entangling foreign alliance”. It gave England nothing it had not already taken and prevented the building of forts at inconvenient places in North America as well as leading to the removal of the forts occupied contrary to the Peace Treaty.
Any weaknesses in the treaty would have been removed had the Democrats allowed Hamilton to go to England to negotiate it. But they were so afraid of his political ascendency that they would not allow his appointment. Jay, as capable as he was, was no Hamilton and the failures in the treaty flowed from his incapacities.
The protective aspects of the tariff as proposed by H were primarily directed at manufacturing necessary for a strong national defense. It was not a high tariff and his arguments regarding “infant industries” held sway for over a century and not just, as you noted, within the US. But even so it was not a protective tariff but designed to maximize revenues within the above constraints.
I have a “man-crush” on ALL patriots who put the needs of the Union above petty personal and regional concerns.
The protective aspects of the tariff as proposed by H were primarily directed at manufacturing necessary for a strong national defense.
I don't care if they were directed at putting a man on the moon. The simple fact is protective tariffs do not work as economic policy because they encourage the protected industry to become lazy and divert its resources into maintaining and expanding its tariff advantage, rather than innovating and bettering their product.
It was not a high tariff
Initially, no. But it quickly became an outrageously high tariff in the 60%+ range as the very same industries Hamilton protected lobbied for more and Congress gave it to them. Hamilton let that cat out of the bag. Hamilton was to the high tariff regimes of the 19th century what FDR is to the Great Society and Obamacare - the direct and complicit intellectual forbearer. And just like welfare queens today, the tariff handouts he initiated were never large enough - they always demanded more until it became so large and so outrageous (Smoot Hawley) that it basically caused the Recession of 1929 to turn into the Great Depression, just like the heirs of FDR's New Deal are driving us into a debt-induced recession today.
and his arguments regarding “infant industries” held sway for over a century and not just, as you noted, within the US.
So what's your point? There were idiots who believed him in the past, and there are idiots who believe him today. It doesn't make him any less wrong, and in fact some of the idiots who believed in (Otto von Bismarck) were quite dangerous individuals for it.
It is rather amusing to listen to your preachments about my “man-crush” and bias only to encounter your ability to swallow the most absurd Jeffersonian versions of reality IN EVERY CASE of controversy.
There is no way to blame Hamilton for the out of control federal spending executed under the party of Jefferson which Hamilton had warned about for over a decade. You know that party created to destroy Hamilton and thwart his efforts.
And it was not his policies which led to disunion but the ludicrous and dangerous constitutional theories of Jefferson. Hamilton’s program certainly ran up against the petty local interests which had crippled the Confederation and it eventually neutered their power and was not designed to coddle the democrats. His program without doubt strengthened the Union and laid the foundations for the great economic success following independence. Had his opponents’ programs been installed our survival would have been very doubtful.
Of the features which this policy exhibited it was the certainty that it WOULD strength the Union which was the element which generated the most opposition. His enemies did not WANT a strengthened Union and they KNEW Hamilton’s program would do just that weakening their influence.
It is interesting that AS IT STOOD Hamilton’s opponents complained that the Report on Public Credit was so “intricate and complicated it appears to require some time and attention to understand...” I’m sure the opponents would have welcomed even MORE intricacy and complication.
Perhaps the most significant economic theory held by Hamilton was the critical need to get rid of slavery in this nation. He knew it was a millstone around the Union’s neck and worked outside of the government to get rid of it as a founder of the New York Society for the Manumission of Slavery. It was this which declared Hamilton’s enmity to the Jeffersonians in all their hypocrisy and which provoked their blind hatred of the man and his ideas. It was this which cemented their determination to destroy him by any means necessary.
It has been said by experts on the subject that Hamilton’s Report on Public Credit marked a watershed in American history and was one of the great state papers on economics and finance. “It marks the end of an era of American bankruptcy and repudiation of debt and the beginning of a long era during which the public credit of the United States would be as sound as that of any other nation.”
That is one hell of an achievement. Hamilton himself commented “it is a curious phenomenon in political history (not easy to be paralleled), that a measure which has elevated the credit of the country from a state of absolute prostration to a state of exalted preeminence, should bring upon the authors of it reprobation and censure.” Thanks to Jefferson’s propagandists.
You are speaking of different Frenchmen.
Those who fought with us against the Brits were generally in JAIL or EXECUTED by the terrorists whom Jefferson exalted. People like Lafayette were declared enemies by Jefferson’s French friends. He barely escaped with his life from the fanatics’ prison and had to shelter his son with Hamilton’s family.
And who do you think was seizing our ships in the hundreds (far more than the Brits were doing) in the 1790s? France was ATTACKING our ships at sea.
only to encounter your ability to swallow the most absurd Jeffersonian versions of reality IN EVERY CASE of controversy.
Why is everything truthful about Hamilton a Jeffersonian conspiracy to you?
Hamilton spends two years paying a guy to prostitute his wife...evil Jeffersonian conspiracy!
Hamilton tries to foment a scheme to invade New Spain, New France, and South America...evil Jeffersonian lies!
Hamilton gets himself into his 10th duel in as many years, only this time it carries through and leaves him dead...evil Jeffersonian killers!
You have a serious case of Jefferson Derangement Syndrome.
There is no way to blame Hamilton for the out of control federal spending executed under the party of Jefferson which Hamilton had warned about for over a decade.
Hate to break it to ya, but the government programs didn't get out of control until the John Quincy Adams administration's internal improvements and high tariff protectionist schemes. Monroe being the last president under the First Party System and Adams Jr. the start of the Second Party System, it is simply silly to blame his excesses on the Jeffersonians.
And it was not his policies which led to disunion
So you're saying that protective tariffs were NOT a recurring source of sectional division for over a century?
Perhaps the most significant economic theory held by Hamilton was the critical need to get rid of slavery in this nation. He knew it was a millstone around the Union’s neck and worked outside of the government to get rid of it as a founder of the New York Society for the Manumission of Slavery.
Oh, so now Hamilton was an abolitionist? That's a curious claim to make about a guy who bought at least 6 slaves during his life at auction and routinely rented out slave laborers from his friends to do his housework. He was NOT a founder of the Manumission Society either, but merely joined the already-organized group at its second meeting at the behest of John Jay.
It has been said by experts on the subject
Ah yes. Unnamed "experts" on the "subject." And what "subject" might that be? Why Hamilton of course! And these "experts" are typically Hamilton hagiographers.
Meanwhile, if you go to any economics department at any university in America today and ask to find a representative of the Hamiltonian School, what do you get? Crickets chirping.
France was ATTACKING our ships at sea.
They were seizing prizes of war engaged in the British trade under the pro-British exclusivity terms of the Jay Treaty.
Was France in the right to do so? No. But was it entirely unprovoked either? No. And Adams was sensible enough to negotiate a peaceful resolution to the problem at a time when Hamilton was trying to drive us head first into an all out war so his little standing army wouldn't go to waste.
Though you seem incapable of finding the data he gathered by writing to people all over the nation it is all there in his papers. The Report on Manufactures and the supporting information takes up two volumes of almost 500 pages each in his papers.
“As the responses to his inquiries poured in and he put the facts together, he came to understand BETTER THAN ANY MAN IN THE COUNTRY what the real problems were and how to surmount them.” He knew we needed a thriving internal market to remove our reliance on foreign markets (which plagues underdeveloped and emerging nations) particularly when war made free trade impossible. He knew we needed to attract more labor and not to the farms but to manufacturing. Unlike the agriculturalists who hated him Hamilton was concentrating on the future. He was also dedicated to developing human potential “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted.” Certainly this generated great fear among the slavers since stimulating their slaves’ minds was anathema to them.
So you are correct that Hamilton's program was not only concerned with revenue but as much with the development of human capabilities. This was far more than simple protectionism. He was attempting to correct the malformation of the American economy created over the 150+ yrs of its subordination to the British Empire and its policies. It was not an ordinary situation.
And, unlike his enemies, he clearly understood the mutual dependence of agriculture and industry and that they would rise and fall together. Encouraging and promoting industry would increase demand for the produces of agriculture and reduce its almost total dependency on foreign demand.
You need to pay more attention to the first word in your quotation IF....
He also understood that making military preparations would REDUCE the chance of war and that is what eventually happened when he and Washington took command of the new military establishment France MYSTERIOUSLY decided it was time to remove the danger of war. Particularly since it had failed to elect its ally, Jefferson.
And apparently you are unaware that Jefferson even as President thought war with Spain was inevitable. He was speaking of these preparations as “eventual security against INVASION.” Not to declare war. And “squinting” at South America is hardly a design to invade outside minds poisoned against the man. He had been aiding Miranda’s proposals to separate Spain’s S. American colonies from the mother country NOT planning a US invasion.
The “mad” Hamilton was the fulcrum around which almost all politics of the 1790s turned. He was, indeed, a Man Without Measure as Jefferson complained “a Colossus.” In THAT at least Jefferson told the truth.
Hmmm lets see the program proposed by the man MOST knowledgeable about the US economy
There's one huge gaping problem with that assertion: you have yet to demonstrate that Hamilton was "the man MOST knowledgeable about the US economy," or anything even remotely close. In fact, most of your claims about Hamilton's supposed economic knowledge have not withstood scrutiny...that is, unless you've managed to find all those "missing" statistical records he supposedly assembled but never bothered transmitting to Congress or anyone else for that matter in his alleged "first ever" study of the new American economy that nevertheless happened to not be published some 6 or more years AFTER the British actually did publish the first study of the same thing.
The Report on Manufactures and the supporting information takes up two volumes of almost 500 pages each in his papers.
Yeah. Because it was a good 70 or so pages itself and went through a half dozen or more drafts, mostly in the pen of Coxe as he sifted through Adam Smith to prepare what was very much a conscious attempt at a rebuttal. And yet in all those assembled pages and drafts, there is virtually no statistical data on the state of U.S. economy. Funny how that worked out.
“As the responses to his inquiries poured in and he put the facts together, he came to understand BETTER THAN ANY MAN IN THE COUNTRY what the real problems were and how to surmount them.”
So you've demonstrated your ability to regurgitate a hagiographic passage from a Hamilton biography. Now exactly what was your point again?
He knew we needed a thriving internal market to remove our reliance on foreign markets (which plagues underdeveloped and emerging nations)
If that is so, then (1) why did he propose to do this with tariffs, which simply DO NOT WORK to achieve that goal, and (2) why did he push through the Jay Treaty, which had explicit provisions that INCREASED our reliance on British markets in the West Indies trade?
Look, I get it that you're on the Hamilton kool-aid. The problem for you is that you will find no respectable economist today in agreement with anything you are saying. That's not to say that there aren't people who agree with it. Protectionist labor unions and the LaRouche cult love Hamiltonian economics. But the rest of the world realized it was bunk a long time ago.
You need to pay more attention to the first word in your quotation IF....
Yeah. And considering he was talking about launching a full scale invasion of the western territories by expanding his anti-French animosities to Spain, and perhaps even turning southward to Mexico and South America, that's a pretty damn big IF.
Those letters reveal the unguarded Hamilton speaking to his confidants about his political dream, and that dream entailed provoking a war of continent-wide conquest. How else do you explain Hamilton's outright loathing and furious reaction when Adams appointed Murray as special envoy to France and successfully negotiated a peaceful end to the Quasi War? No sane man could fault Adams for that - only a madman who enjoyed the war and wished for its escalation. And those letters reveal that Hamilton was such a man.
He was speaking of these preparations as “eventual security against INVASION.”
Attained by preemptively invading all of South America? Hell, by that standard I'm surprised Hamilton didn't insist we simply conquer Europe itself and be done with it all, thereby preventing World Wars I & II over a hundred years later in the name of "eventual security."
Hamilton was instructed by Washington to draw up guidelines for Jay and one of his two “inflexible” rules was American ships MUST BE granted UNRESTRICTED entry into the West Indies. The other was that no resulting treaty was to be entered into that would affect unfavorably the existing treaty with FRANCE.
And you complain about Hamilton, why?
And keep lying about Pacificus as a war monger, why?
I note you keep ignoring the fact that the democrats had prevented our ablest negotiator ENTIRELY FOR POLITICAL REASONS from undertaking the negotiations himself.
Much of the opposition to the treaty Jay brought home was that it did not address the slavers’ chief concern - payment for slaves freed by the British during the War.
It did open up the Indies to American ships, opened the Mississippi to ships from both nations, obtained payment for American ships seized by the Brits, and began the removal of British forts within the US something we did not have a military capable of addressing. It opened the West to settlement by reducing the danger from British backed Indian attacks.
France did not start seizing American ships after the treaty it had been doing so before and it was not just seizing war materials either but deliberately violated American neutrality by dragging prizes into our ports to the insane cheers of the Jeffersonian rabble.
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