Wow. I had thought that Hamilton was a “bad” Founding Father, but I didn’t know how bad! But if we’ve had Hamilton’s “American system”, and reinforced it with the Federal Reserve, how do they explain how free market capitalism wormed its way into their wonderful system to cause problems?
CNN’s running some kind of stupid “Crisis of Capitalism” story, and it’s driving me nuts to hear the lunacy of their comments. Looks to me that free market capitalism is going to get blamed for the problem, and the media is going to make it stick: “That’s my story, and I’m stickin’ to it!” Is it uncivil of me to call them idiots?

Michael, regarding your comment concerning CNN, I do not believe that they and the media in general are “idiots.” Rather, they have their vision of what this country should be and utilize their media position to propagandize and opinion mold. Most importantly, the facts and the truth mean little to them. Their goal is to shape society to their vision, and if this requires lying, omitting pertinent information, and increasing the coercive power of the state, so be it. Actually, because of their general lack of honesty and integrity, they deserve to be labeled much worse than idiots.

The Hamilton worshiping, Jefferson bashing, article was not only in the online edition, but indeed in the printed edition as well. I was immediately thinking that someone like TDL should write a thorough rebuttal like this.

To paraphrase that other curse, Lincoln, “God must have loved Hamilton. Look how many $10 bills with his picture on them He made.”

$10 bills DO come from God, don’t they?

The way I see it.

Hamilton’s attempt was to import the “mercantilism” of the English autocracy, but primarily its system of private money creation and banking.
“”permit me to create and control the nations money….”", and all that.
Opposed by not only the mentioned Jefferson and Madison, but also Adams, Van Buren, Jackson and others, that private money-creation system was designed into several iterations of American banking after Lincoln created greenbacks and attempted to do away with it.

Today we have the glowing beacon of an example of Hamilton’s dream in the federal reserve.
It is private money creation, of a debt-money nature. Economic enslavement.

The thing I fail to comprehend of the Mises followers is why it is characterized as a government-run shebang.
It is completely private.
The only thing the government did was to create it and empower the bank street merchants.

All of the presidents mentioned, and many others, supported a government-issue of the nation’s money, and what would be 100 percent reserve banking.
As do I.

As a follow-up to the first paragraph of Joebhed’s comment, yes, John Adams opposed Hamilton’s fiat money program, even though Adams and Hamilton were both members of the Federalist Party.

Sorry if I offended anyone.
That was not my intent.

Just to be clear.
You’re saying the federal reserve banking system is “anything but private” just because the government has to go there to borrow money to “fund” its activities?
The way I see things, the FED is operated by private entities for their sole private gain.
And that, to me, is the definition of private.

That it has a cartel license from the government does nothing to change that, except to give cause for its abolition.
But, the nature of its operation is private.

I definitely agree that the government’s crime was in the creation of the federal reserve, obviously for a different reason than yours.
We, the sovereign people, had the right to establish a money system, having gained it through a victorious struggle over the English money lords.
Our Congress gave that right to the private bankers at the FED and in so doing destroyed the economic freedom of the American people.
If you take away the FED’s money creation power, and establish a 100 percent reserve basis for all banking, then we would have the kind of open market banking activities that many seem to espouse on these pages.
There would be real competition among banks and among types of banks.
So, what’s wrong with that again?
Oh yeah, price stability.
That dastardly tool of government planners.

Sorry for the interruption.

If this article is representative of DiLorenzo’s book I will pass. You would think that an article on someone with as much written material as Alexander Hamilton would contain more than two direct quotes of three words each taken totally out of context.

Reading this article I wondered if DeLorenzo has actually ever read any of Alexander Hamilton’s writings. DeLorenzo does seem to enjoy reading Hamilton’s mind, telling us what he was thinking and why he made his decisions as he did (of course with no quotes from Hamilton himself).

And his blind praise of Jefferson and Jackson is laughable. Jefferson inherited a prosperous economy of peace much as Clinton inherited his prosperity. But Jefferson’s foolish embargo almost caused New York to secede from the union. Then Jackson’s took all the federal money and sent it to his pet state banks allowing massive inflation on the frontier. Inflation was so out of control that he issued his Specie Circular causing massive deflation and ultimately the Panic of 1837, one of the worst economic recessions our country has ever seen.

If it were not for Alexander Hamilton it is doubtful that our nation would exist today. He pulled the nation from virtual bankruptcy, returned the country to the gold standard, and restored American bonds to the strongest in Europe – and he did all this in 4 years.

I’ve read Modern Money Mechanics.
I understand the difference between the operations and earnings of the MotherFED and the member banks.

The Fed is a “system” of private bankers.
The profits of the private member banks of the federal reserve, who are each and all blessed by the FRA with the private privilege of creating new money, are kept by the private bankers.
Surely you agree with that.
So, that’s maybe two hundred billion in profits annually.
And THAT is the private gain.

The fact that the prez has a sign-off from among those nominated by the private banking cartel is surely your joke of the day.

Every public utility operating in this country has a monopoly franchise that produces private profits for its shareholders, and every professional entrepreneur has a license from the government to carry on that profession.
Surely THAT doesn’t make any of them either government entities or anything but private entities.

After recognizing the gains from 100 percent money, you postulate some financial largesse by the government that COULD happen, but wouldn’t be likely. The money creation power would still be limited to the purposes that Milton Friedman espoused and that I agree with, enabling economic growth amid price stability.
The economic growth would be driven by the lending practices of the 100 percent reserve bankers. Price stability would be the result of the quantity function carried out by the government.

As for overall price stability(non-inflation) versus the stability of the “value” of a dollar, I have no idea why you or anyone would believe that a free market in money creation operated by private bankers would be LESS prone to the business cycles than what you attribute to the government.

The problem of the business cycle is inherent in the fractional reserve debt-money system. Do away with debt-money and you do away with the NEED for bubbled growth and confiscatory contraction.

On public utilities. Where you agree that they are government-licensed and totally private entities that produce private profit proves my earlier point vis the FED.
And, where the notion of a government-license for an efficient power grid is an objectionable privilege, would there be six sets of poles going down each side of the road in order to produce free market electricity?
What you refer to as the privilege that is extended by the government, it is truly rather a right of the people to demand that public infrastructure exist and operate at the lowest cost possible.
The consumer – as opposed to producer – is privileged in this case.
As is the land and the environment.

After reading your particular Austrian idea of the business cycle, I again see a great deal of agreement in many of your observations. I don’t necessarily agree on cause and effect.
Interest rates are but a minor part of the quantity of money that is created in all areas, and I think they are a totally inappropriate and ineffective tool in managing the growth, or reduction, in the actual quantity of the money supply. They are a market solution to a public policy problem. Unnecessary and immaterial, except as measure of the risk-reward inherent in real money being lent.

Whatever the function, I totally agree that the effect is the bubble supply of money in the economy is greater than the productive and consumptive capacities of the economy, which is, as we agree, inflationary and wrong. And stupid. And inefficient. And, yet, it happens.

The reason that it happens is not that the government wants it to happen. The government lets it happen because that is the way the bankers want it. Self-regulating. A free market in money-creation. Again, the failure of the government. It’s one of those corrupting things that we need to get out of government. The power of the money creators.

You then attribute to “market competition” the savings grace that banks would be more restrictive in lending and credit. Here I see that as a very real benefit that results from the establishment of banks lending real money. And I don’t mean metallic money, I mean the banks are only lending the money they really have in their vaults as 100 percent reserve money. THAT is the mechanism that will ensure an efficient, equitable and free marketplace. Which is what we all want.
And, which we can have without free banking, as it is called, and free money.

You ask why the “government” should give up the fractional-reserve, debt money system of the private bankers. And you answer that we should demand it. From government. From a government that abdicated its responsibility to create and control the nation’s money system over to the private bankers. Delegated away the power of the people to create their own money. In their own name.
So, to me it is not a matter of taking that power away from the federal government, it is a matter of returning it to the federal government. And to the people.
The money-creation power.
That is the issue.

And, where the notion of a government-license for an efficient power grid is an objectionable privilege, would there be six sets of poles going down each side of the road in order to produce free market electricity?
Governments license “efficient” power grids? Gimme a break! Or ask California about that. No, I seriously doubt that there would be six sets of poles–like many people you underestimate the creativity of free minds and free markets. As the telephone companies were beginning to do before the telephone system was monopolized, electric companies would work out equitable arrangements to share the electrical grid, and would be encouraged to improve on it for greater capacity and adaptibility, two things that licensing does not encourage.
And “public” infrastructure is no more a right than any other good or service we have, since it takes real resources and labor to produce them.
I agree that I want 100% reserve banking, but I seriously doubt that merely demanding it from the politicians will get it for us. Your vote and your status as a citizen don’t really count for much when it comes to government. Much more radical action will be necessary to “reform” the banking system, and I doubt anything will be very successful or long-lasting until we completely take it from the government and give it back to “the people”, i.e., the market.

Or, remove the government from money creation and end all monopoly privileges enjoyed by both “private” and “public” figures.

Every village has its idiot, and here Joebhed is doing his best to earn that title.

Keep in mind that a favorite tactic of online disinformation artists is carrying on endless, circular debates in the comments sections of popular web sites.

Great article btw.

We have ‘Missed’ a unique chance to Sustain Humanity in this century by not changing our basic Economic Structures and allowing the present Financial Market System to prevail

When one considers what the future holds, a world population of between 9.5 and 10.5 billion by 2050 (possibly even up to 12 billion), ever-dwindling natural resources to support human life and the dire effects of climate change through carbon and pollution emission, is it not clear that we have to change our economics to ‘Ethical’ and ‘Sustainable’ economics? For if we carry on with the present capitalist economic system, where the very few become rich beyond their wildest dreams and the majority are kept in relative poverty through the crumbs that drop from the rich man’s table, our young and future generations to come will eventually suffer immeasurably suffering. Indeed, governments are still presently blinded by current economic dogma and minority vested interests that do not look after the well-being of all people.
Therefore we have to change to new economic systems that are sustainable and where the needs of the vast majority of the people are addressed. In this respect it is a little know fact but it only takes a reduction of no more than a 15% drop in global oil supply to bring eventually the whole of the global economy to its knees.
We have therefore to supplant the present capitalist systems and economics with ‘sustainable’ systems and ‘need’ economics before it is far too late to change. That does not mean that we do away with ‘markets’, as ‘markets’ are the only way in which trade occurs. It is how we operate those markets is the problem for sustainability and public need.
But unfortunately to allow this to happen, governments should have started the critical need to change to these ‘ethical’ economic structures at the start of the credit crunch and should not have supported the banking system as they have. In this respect we would have had a decade of comparative hardship but where we would have eventually attained a new way forward for humankind based upon sustainability and necessary human need economics. Now, having rescued the banks and other large corporate entities we are still on the same road to our ultimate destruction as a species. For nothing has and will really change, as the same system will in principal be with us, ‘capitalism’ in another disguise. Unfortunately governments are in the main dictated too by big business and where whose only aim is profit, no matter how they achieve it. Considering this the world will continue in decline in human development terms and where at the end of this road awaits a nightmarish vision for humankind. Therefore wouldn’t it have been better to change now, go through 10-years of pain whilst we forge new equitable economic systems and then have a lasting environment for all generations to come. But no, governments and big business will not allow this to happen and accept the inevitable dire problems that they will cause through still adopting the basic premise of the capitalist system – profits, greed and self-interest to the detriment of all humankind. That is why governments now spend around £1 trillion on armaments and defence alone every year as they know that the capitalist system will eventually lead to global wars and aggression, as nations eventually fight for ever depleting natural resources under the dictates of the ‘capitalist’ market forces and economic principals – the law of the fittest and strongest and who will win through. But this time there will be NO winners it has to be said. We have now therefore lost a major chance in providing humankind with the means to a sustainable future in this century and where our political leaders should reassess their economic strategy, for what they do now will affect the very survival of the human experience itself.

Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

to david hill:
your dystopia is fascism, and probably a fair vision of the future.

capitalism/laissez-faire/economic freedom without political favour is the greenest of all systems. the only way to ensure scarce resources are cared for rationally. self-interest is a force for the public good, providing competition is not suffocated and property rights are upheld.

Sunday, October 26, 2008
UnConstitutional Coup Is Like Kudzu!

The Federal government launched a massive promotional campaign for Kudzu leading to 1.2 million hectares of kudzu planted by 1946 with farmers being paid $20 per hectare to plant it!

Now to the analogy! The first ‘kudzu plant of the unConstitutional coup’ was planted by Alexander Hamilton, the archenemy of Thomas Jefferson who betrayed the American Revolution. That seed germinated and produced more seeds that germinated as the Whig party of Henry Clay.

The next crop of seeds of the kudzu of the unConstitutional coup germinated in the 1860′s with the National Currency Acts and with the direct attack on States rights.

The next crop germinated in 1913 with the institutionalization of the unconstitutional federal reserve system and the federal income tax. At this point it was climbing over everything and beginning to choke out all the ‘native plants’ of productivity and entrepreneurial spirit and property rights.

Keynesianism was the next crop of kudzu that spread the scourge of the unConstitutional coup. Year after year this invasive and suffocating unConstitutional coup became more pervasive.

Now the unConstitutional coup kudzu is so monstrous that it covers everything and liberty and justice are barely able to be sustained in what used to be a prosperous and free nation.

It will take hard work to eradicate this noxious weed. Property rights are essential because no one is going to go out and try to eradicate the kudzu nor be able to sustain that effort unless there is private property. Once there is private property that will be enough protection and incentive to uproot the kudzu and suppress its germination thereby restoring the prosperity of the Constitutional Republic.

States rights with the right of secession, and property rights recognized as human rights in the justice system are some of the first steps towards the eradication of the kudzu of the UnConstitutional coup.

Last week’s blog on Thomas DiLorenzo’s Hamilton’s Curse reminded me of the objections I had with his book. None of these objections deal with DiLorenzo’s critique of Hamiltonian economic policy; in fact DiLorezno’s book was my first exposure to the Ludwig von Mises Institute and DiLorenzo’s brilliant explanation of the consequences of Hamiltonianism was so effective that it completely changed my perspective of American history and stressed to me the importance of sound economic understanding. This is typically one of the first books I recommend to people interested in learning more about the credibility of revisionist history.

My complaint with DiLorenzo’s work deals mainly in his portrayal of Alexander Hamilton – the man. Those otherwise unfamiliar with General Hamilton would leave DiLorenzo’s work with the impression that Hamilton was a manipulative schemer who laughed maniacally in his dungeon as he carefully orchestrated the eventual enslavement of America. In fact DiLorenzo couldn’t even bring himself to give Hamilton credit for his abolitionist views. As biographer Ron Chernoff points out, Hamilton was a proud and active member of the abolitionist New York Manumission Society and that as a legal adviser, “helped defend free blacks when slave masters from out of state brandished bills of sale and tried to snatch them off the New York streets.” Though his work as an abolitionist does not absolve the faults of Hamiltonianism, I fail to see the benefit of unfair criticisms. It seems to me that DiLorenzo’s goal in Hamilton’s Curse went beyond pointing out the fallacies of Hamilton’s policy objectives and instead sought to trarnish his legacy in general. I contend that DiLorenzo overreaches.

Hamilton the Man

What attracted me to DiLorenzo’s book was actually the brilliance of Hamilton’s life. I admired Hamilton and wanted a different viewpoint. The story of Alexander Hamilton is a uniquely American one: the bastard son of a disgraced Scot of noble blood, Hamilton came to this country due to the charity of the inhabitants of his Caribbean island who recognized young Alex’s natural talent. Entering New York’s King’s College on the back of the charity of others, Hamilton would grasp the opportunity and never look back. As a collegiate, Hamilton wrote letters in defense of American independence that were so eloquently written that many prominent New Yorkers thought they stemmed from the pen of John Jay. When shots were fired in Lexington and Concord, Hamilton took arms in the defense of colonial liberty. In short time young Hamilton caught the eye of General George Washington, and at age 22 he would become the campe-de-aide for Washington and entrusted him with the most sensitive of missions. Hamilton would finally be allowed to lead his own battalion during the decisive Battle of Yorktown where he characteristically rose to the opportunity.

After the Revolutionary War, Hamilton became an extremely successful New York attorney after choosing self-instruction rather than the more typical route of apprenticeship. Demonstrating his belief in the necessity of protecting the rights of all Americans, the veteran Hamilton made a mark defending the rights and property of loyalist-New Yorkers. Washington’s colonel became a devoted nationalist during his military service and was recognized for his devotion to his adopted country. It was inevitable that Hamilton would work his way into early-American politics and worked closely with James Madison to call for the Constitutional Convention.

In Philadelphia, Hamilton unveiled his vision for American government: a President serving for life on good behavior, Senators serving for life on good behavior, and an Assembly elected every three years. In Hamilton’s vision, the President would have absolute veto, the Supreme Court would have immediate jurisdiction of all lawsuits and the Federal government would appoint the State governors. As Hamilton expected his proposal went nowhere, but Hamilton would fight for the ratification for the product created at the Convention, most notably as chief writer of the Federalist Papers. In spite of his preference for centralized power, Hamilton will be forever known as the founder of the ironically named Federalist Party.

It was as Treasury Secretary that Hamilton would leave his most disastrous mark in American history. Inspired by Jean-Baptiste Colbert, Chief Finance Minister of the “Sun King” Louis XIV, Hamilton encouraged an economic policy consisting of a central bank, government subsidization of industry and protectionist tariffs. Though Hamilton himself can be praised for his being above corruption while at the Treasury, his actions directly led to privileged men “in the know” to enrich themselves from his policy. In describing Hamiltonian economic policy, I will defer to DiLorenzo who writes:

Hamilton was an American mercantilist, and he and his party (and its political heirs, the Whigs and Republicans) advocated special-interest policies that would primarily benefit politically connected merchants, manufactures, speculators, and bankers at the expense of the rest of the public.

Though Hamilton himself did not serve (nor get along with) Federalist President John Adams, Hamilton was a favorite amongst Adams cabinet – much to Adams disgust. Hamilton’s Federalist Party would lose the White House to Thomas Jefferson in the election of 1800 and the philosophy of the Federal government followed; Hamiltonian nationalism replaced by Jeffersonian liberalism. The American public reacted well to the change: Virginian Jeffersonians controlled the White House for the next 24 years, 1816-1824 became known as the “Era of Good Feelings” and Jefferson’s Republican Party became the sole political party in the country until the controversial election of 1824 (an election where the Jefferson-backed William Crawford received more electoral votes than future-Whig leader Henry Clay and likely would have won the Presidency if not for a debilitating stroke.)

The defeated Hamilton would spend his final years focusing on religion and attacking the Jefferson Administration, mainly through the creation of the newspaper known today as the New York Post. Hamilton was famously killed in a duel with the Vice President of the United States at the same site his firstborn son, Philip, dueled to the death three years earlier.

DiLorenzo’s Hamilton

Hamilton’s impressive narrative inspired me. If Hamilton could begin to change his world by the time he turned 22, so would I. After reading DiLorenzo’s book, however, I was forced to take another look at my new hero. As I took to studying economics, DiLorenzo’s critique of Hamiltonian policy held up – his characterization of Hamilton doesn’t.

DiLorenzo’s Hamilton is a devoted enemy of liberty who fancied himself something of an American Napoleon. DiLorenzo often relies upon the opinion of Thomas Jefferson and his allies in painting Hamilton’s character. For example, in pointing to Hamilton’s lengthy defense of a national bank, DiLorenzo writes: “He authored another long-winded report on the supposed constitutionality of the bank, a report that Jefferson believed was, like the others, intentionally confusing.” Obviously using the opinion of Hamilton’s greatest rival to decipher Hamilton’s intention is questionable scholarship. DiLorenzo again points to a Jeffersonian perception of Hamilton as he point outs, “historian John C. Miller noted that Jefferson’s party had ‘suspicions that the army had been strengthened in 1798 not to fight Frenchmen but to suppress opposition to Federalist policies.”

Four times in his book DiLorenzo quotes Hamilton’s description of the Constitution as a “frail and worthless document”, the implication that the author of the Federalist Papers had little use for the document and that he merely played the role of advocate so he could boost his own political power. Did DiLorenzo catch a slip-up from the duplicitous Hamilton? Let’s look at the quote, found in a letter to Gouverneur Morris, in context:

Mine is an odd destiny. Perhaps no man in the U States has sacrificed or done more for the present Constitution than myself. And contrary to all my anticipations of its fate, as you know from the very beginning, I am still labouring to prop the frail and worthless fabric. Yet I have the murmur of its friends no less than the curses of its foes for my rewards. What can I do better than withdraw from the scene? Every day proves to me more and more that this American world was not made for me.

This letter was written during the darkest days of Hamilton’s life following the death of his son and after Jefferson’s success had relegated Hamilton into a political outcast. Does this sound like an enemy of the Constitution? Or does it sound like a defeated man tired of constantly being painted as its enemy? The recipient of his letter would later state at Hamilton’s funeral that, “His speculative opinions were treated as deliberate designs and yet you all know how strenuous, how unremitting, were his efforts to establish and preserve the Constitution.”

Hamilton’s Curse

Though Hamilton was a product of the island of Nevis, he was perhaps the loudest voice advocating America to resemble European powers. Though I disagree with DiLorenzo’s view of Hamilton, I cannot deny the reality that Alexander Hamilton was a nationalist mercantilist. How did Revolutionary America create such a leader? I point to Hamilton’s upbringing and intellectual development. Where DiLorenzo sees a manipulative power hungry politician, I see a well-meaning patriot who dedicated himself to creating the best country possible for his fellow Americas. Where DiLorenzo sees intentional malice, I see the tragedy of a guy who simply got it wrong.

Lets start with Hamilton’s upbringing. As Ron Chernoff notes: “Island life contained enough bloodcurdling scenes to darken Hamilton’s vision for life, instilling an ineradicable pessimism about human nature that infused all his writing.” Even as a boy, Hamilton’s writings are tainted with this darkness. Noted young Hamilton, “And let me tell you, in this selfish, rapacious world, a little discretion is, at worst, only a venial sin.” His worldview led Hamilton to always be attracted to the philosophy of David Hume.

Where most Founding Fathers held a very romantic view of the American Revolution, Hamilton recognized the horrors of the mobs that helped sparked it, often resorting to barbarous measuring such as tarring and feathering and riding the rail. Hamilton’s loyalist college president, Dr. Myles Cooper, was a target of one of these mobs when collegiate Hamilton bravely stood before them and spoke. He admonished the mob, telling them their actions “disgrace and injure the glorious cause of liberty.”

Occurrences such as this made Hamilton fear the chaos of anarchy and he viewed that government needed to be strong enough to calm the passions of men. In the Federalist Papers Hamilton would later write: “In a nation of philosophers a reverence for the laws would be sufficiently inculcated by the voice of an enlightened reason. But a nation of philosopher is as little to be expected as the philosophical race of kings wish for by Plato. And in every other nation, the most rational government will not find it a superfluous advantage to have the prejudices of the community on its side.”

This view of mankind explains the fundamental difference in philosophy between Hamilton and Jefferson. Jefferson viewed government as an institution that threatened the rights of man; Hamilton viewed it as a means to ensure a peaceful and prosperous society – as long as it accurately represents the interest of its subjects.

But did this necessarily force Hamilton to be a nationalist? The elder Hamilton certainly was, which explains his rejection of the Kentucky and Virginia Resolutions. I think it is interesting, however, to look at Hamilton’s collegiate writings. In his first great success, The Farmer Refuted, Hamilton sounded rather Jeffersonian when he wrote, “The nations of Turkey, Russia, France, Spain, and all other despotic kingdoms in the world, have an inherent right, whenever they please, to shake off the yoke of servitude (though sanctioned by the immemorial usage of their ancestors), and to model their government upon the principles of civil liberty.” Throughout the article Hamilton frequently speaks of the sanctity of human rights. “I am inviolably attached to the essential rights of mankind and the true interests of society. I consider civil liberty, in a genuine, unadulterated sense, as the greatest of terrestrial blessings. I am convinced that the whole human race is entitled to it, and that it can be wrested from no part of them without the blackest and most aggravated guilt.”

What do I attribute to this reversal of philosophy? Hamilton’s military service. A liberal government is best suited for peace, not war and the difficulties General Washington had in securing appropriate funds from the Continental government is well documented. Hamilton had a first hand view of these difficulties. The nature of military service to lead great American minds to nationalism over liberalism is further validated by an American President DiLorenzo speaks favorable of: Andrew Jackson. Though Jackson, as Murray Rothbard noted, held sound economic philosophy, he combined it with a nationalist governmental philosophy. When South Carolina threatened to secede over the issue of tariffs, Jackson threatened to invade the state.

DiLorenzo implies that Hamilton’s monarchist visions are incompatible with Jefferson’s liberalism. When I first encountered Hamilton’s vision for government, I too found myself a bit turned off. It was an article from Mises Daily that forced me to reconsider its merits. Hamilton understood the danger of democracy, fearing that such a system would produce demagogues who, as Chernoff writes, “fed off poplar confusion while proclaiming popular rights.”

Of course it is Hamilton’s economic policy that draws the majority of DiLorenzo’s scorn and for very good reason. In order to understand how a man of Hamilton’s talent could produce such a terrible economic program, we must recognize that he did not benefit from the experiences, nor the writings, of Ludwig von Mises or the rest of the Austrian School. In fact the economic science as a whole was still new with Richard Cantillon’s Essai sur la Nature du Commerce en Général written just 25 years before Hamilton’s birth and the Wealth of Nations 20 years after. Furthermore the British Empire, who had the most powerful economy in the world and whose success Hamilton aspired to replicate, was founded on mercantilism that contradicted Smith’s vision. Hamilton educated himself with voracious reading; unfortunately, as Murray Rothbard points out, “The mercantilists, dominant in economic thought for the preceding century or two, were special pleaders whose tidbits of analysis were pressed into the service of political ends, either in subsidizing particular interests or in building up the power of the state.” Hamilton gobbled down these works, fueling his mercantilist visions.

Conclusion

It is easy to demonize those we disagree with – especially for classical liberals, like myself, whose philosophical foundation forces us to view the advocates of large and energetic government as enemies to our natural rights. Though Hamilton’s economic philosophy cannot be defended, and though I recognize the consequences of it and his intellectual heirs as the source of great injustice in today’s world, we must constrain ourselves to attacking ideas – not the character of those behind them. Not only do I reject DiLorenzo’s portrayal of Hamilton, but I also believe it undermines the greatest lesson we can learn from it. Alexander Hamilton represents the ideal government bureaucrat: a brilliant man beyond corruption who dedicated his life to serving his country. And even he was wrong. If Alexander Hamilton couldn’t successfully micromanage our economy, how can we place such faith in any leader?