News / Review

Italian Journal Reviews Hamilton Versus Wall Street

By Nancy Spannaus

July 18, 2019—It’s hot off the press (or the Internet, I guess you would say today). AspeniaOnline, the digital journal of the Aspen Institute Italia, has just published a review of Hamilton Versus Wall Street. According to its website, “Aspenia is a forum where the major themes of international affairs can be developed in a flexible fashion and in an agile editorial format.” The magazine publishes in English and Italian. (This review is in English.)

The author, my son Andrew, is a regular contributor to the journal.

Take a look, and, if you haven’t already, buy a book. You can find some more reasons why by looking at my interview, and previous short statements of endorsement.

I am reproducing the full article below.

Alexander Hamilton: a guide to US economic rebirth?

By Andrew Spannaus On Jul 18, 2019

One thing should be clear from the populist explosion of the last few years in the United States and Europe: the effects of globalization on the middle class are real, having brought a profound transformation in the nature of the industrial economy in most Western countries. There is plenty of debate as to whether this change can, or even should be, reversed; criticism is common of attempts to turn back the clock by implementing a new industrial policy – including aspects of protectionism – that aims to revive manufacturing and defend national prerogatives. Between Donald Trump’s “America First” and the plan for “Economic Patriotism” rolled out by Elizabeth Warren, the time has come for a deeper discussion of just what an “American” economic policy means today.

“Hamilton versus Wall Street” is a new book by Nancy Bradeen Spannaus, an American political journalist who has studied the works of Alexander Hamilton for decades (full disclosure: as her son, I can attest to that). As the title indicates, the study seeks to counter the common refrain that the first Treasury Secretary of the United States was the forerunner of today’s financial system, a name to be bandied about when convenient to defend the speculative mechanisms of Wall Street as essential for an economy based on free enterprise.

According to Spannaus, the reality is quite different. Alexander Hamilton is the father of what can be – and was in the past – defined as the “American System of Economics which provided the unique basis for building the United States into an industrial powerhouse”.(ix) This system is contrasted with the “horrendous exploitation of mankind” by the British Empire – the explicit enemy of the US Founding Fathers, of course – seen as the precursor of a corrupt financial system that lives on today in placing financial profit above all else.

Italian Journal Reviews Hamilton Versus Wall Street

A painting of Alexander Hamilton

Spannaus avoids directly commenting on today’s politics, although she does provide a brief concluding chapter on how to translate Hamilton’s ideas into specific proposals for the revival of the US physical economy. Yet in using detailed historical examples to outline the pillars of the American System as developed by Hamilton, the author makes it abundantly clear that each time these principles have been abandoned, the consequences have been drastic, as epitomized by the problems we see today.

Hamilton versus Wall Street deals with three major areas: public credit and banking, manufactures, and infrastructure. The first, the creation of a stable financial system, shows both Hamilton’s brilliance in establishing the credibility of the newly independent government, and the difficulty he had combatting private interests that often sought to exploit the new system for their own speculative advantage.

Faced with a crushing debt burden due to the Revolution, Hamilton devised an ingenious plan to transform that debt, “into a source of credit and capital which could be used to invest in developing the nation”. (134) As Treasury Secretary, Hamilton assumed the debts of all of the states, thus greatly increasing the overall federal debt, and used that as the basis for collecting funds through government bonds, in order to fund the nation’s economic growth. In 1781, he wrote “A national debt, if it is not too excessive, will be to us a national blessing” and thus did not seek to pay it off! By setting a moderate interest rate to be paid to bond- and stockholders, he knew that using the incoming funds to invest in manufactures and infrastructure would provide an even higher return, both establishing a stable currency and banking system, and giving substance to the government’s policies, by fostering economic growth.

The funding for such growth came through a national bank, capitalized using the new government bonds. The bank was a quasi-private institution, but was not itself allowed to trade in government bonds, and its explicit mission was to “provide credit for enhancing the productive activity of the country in agriculture, manufacturing, and commerce” (139) – a far cry from the central banks of today, which prop up the financial sector, but expressly avoid providing support directly to the real economy.

The creation of the government bond market is considered by many as the foundation for today’s financial system, but Spannaus uses historical references and direct quotes to show that Hamilton’s idea was to block speculation, not to promote it. Yet he immediately had to deal with private interests that created bubbles and sought to capitalize on the new system. On this point, Hamilton was quite clear: speculation reflected a “spirit of gambling”, and a line of separation was needed “between respectable stockholders and dealers in the funds and mere unprincipled gamblers”. (13) The fight over the Bank of the United States continued through the first half of the 1800s, as economic nationalists such as Henry Clay, Mathew Carey, and ultimately, Abraham Lincoln, championed the Bank under the mantle of economic nationalism. In his campaign for Congress in 1832, Lincoln said:

“My politics are short and sweet, like the old woman’s dance. I am in favor of a National bank. I am in favor of the internal improvement system and a high protective tariff. These are my sentiments and political principles”. (134)

Hamilton’s Society for Useful Manufactures at Passaic Falls, New Jersey (This picture is not in the Aspenia article-nbs))

The Report on Manufactures is perhaps Hamilton’s most famous written work. Spannaus dedicates a great deal of attention to the Report, going through the extensive benefits of manufacturing listed by Hamilton, and his detailed responses to his critics. She revels, however, in presenting Hamilton’s views as expressly opposed to those of Adam Smith, contrary to the many who believe that the “invisible hand” of free trade is the basis of America’s tremendous growth. Spannaus traces Hamilton’s criticism of Smith’s view that growth in manufactures can only be produced through a zero-sum game, subtracting resources from agriculture. Hamilton rejects the notion that trade creates wealth, focusing on the importance of machinery, which he views as essential to increase “the productive powers of labor”. Not only does the growth of manufacturing encourage growth in agriculture, by creating new markets for its products and thus reducing dependence on foreign buyers, but it “stimulates the activity of the human mind, by multiplying the objects of enterprise”.(28) According to Spannaus, this concept is at the heart of Hamilton’s thinking: not mere materialism, but rather the development of human creativity as a source of inventiveness and productivity, encouraged through the spread of the arts, sciences, and technology. (29)

The role of infrastructure in such a policy comes naturally. What were then called “internal improvements” played a key role in both uniting the nation and increasing overall productivity. Hamilton saw the National Bank as crucial here, but the explosion of infrastructure building would not actually come until well after his death, when the Second Bank of the United States was chartered, leading to expanded investment in areas such as canals and railroads, and the iron and coal industries.

The natural question to ask, is if all of this still applies today. In a so-called post-industrial economy, where services have become king, digital promises to transform many sectors, and there has been a broad consensus that open markets produce growth, does it really make sense to look to a past characterized by state intervention and protection, in the name of the national interest?

A quick look around the world suggests that such principles have never actually left us, they have just been obfuscated a form of globalization that caters to a limited swath of the population. If we consider the strongest economies in the world, from China to Germany, we find that investment in infrastructure and industry are central to their success. The “knowledge economy” and digital technologies have a major role to play, but to think that they will supplant the need for public finance, efficient infrastructure and more advanced machinery, seems not only superficial, but also specious. In her book, Nancy Bradeen Spannaus shows us that Hamilton’s American System is not merely a relic of the past, and is certainly not antithetical to freedom and democracy; rather, it was the foundation of the creation of the United States of America, and deserves another look today, given the crisis created by policies that when the nation was born, were considered the hallmark of empires, and based on a “degraded view of man and society”. (169)

All numbers in ( ) refer to the pages of the book:

Spannaus, Nancy Bradeen, “Hamilton versus Wall Street: The Core Principles of the American System of Economic”

Italian Journal Reviews Hamilton Versus Wall Street

Andrew Spannaus at an event in September 2018.

Andrew Spannaus is a freelance journalist and analyst based in Italy. He is the elected Chairman of the Milan Foreign Press Association and the founder of, that provides news and analysis to institutions and businesses. His book “Original Sins: Globalization, Populism, and the Six Contradictions Facing the European Union” is due out in April 2019.



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