Review

New Book Unravels Hamilton’s “Energetic Government”

Alexander Hamilton’s Public Administration

Richard T. Green

University of Alabama Press, Tuscaloosa

2019, 258 pp.

 

A Review by Nancy Spannaus

Sept. 13, 2019—The title of Richard Green’s book Alexander Hamilton’s Public Administration, while accurate, by no means captures the critical content of this excellent book.  For, unlike many other authors, Green puts a major emphasis on how Hamilton’s theory and practice of government depended crucially on his commitment to creating a “republican infrastructure” that would serve the development of his system of economic development. As a political economist, Green argues, Hamilton sought to create an administrative system that would stimulate the economy, maintain national defense, build a necessary infrastructure, and educate public servants, both civilian and military.

Without understanding this context, Green writes, Hamilton’s administrative structure cannot be understood. Hamilton is best known for advocating energy in government, of course, and with that, a strong executive power in the Presidency. Yet those who would conclude that this founder would approve of the kind of “unitary executive” that has increasingly characterized the practice of the Federal government would be mistaken, according to Green. Hamilton envisioned an administrative apparatus of public servants who pledged their loyalty to the Constitution and its objectives, not to the man in the White House and his whims.

New Book Unravels Hamilton's "Energetic Government"

Alexander Hamilton at the Treasury

I was particularly pleased to find this book, especially since I believe it buttresses my own arguments in Hamilton Versus Wall Street: The Core Principles of the American System of Economics. Dr. Green, a professor at the University of Utah, embraces many of the conclusions by the late Forrest McDonald in discussing Hamilton’s economics, as I do, and repeatedly cites the work of the Swiss jurist Emmerich Vattel as a major influence on Hamilton’s thinking. Vattel was a follower of the ideas of the German philosopher Gottfried Leibniz, and a proponent of his humanist theories of natural law. To argue that Hamilton substantially hewed to Vattel’s views, is to counter the widely-touted conclusion that the first Treasury Secretary was a devotee of British thinkers like David Hume and Adam Smith.

The importance of challenging that popular view comprises a major portion of my book, which argues that Hamilton’s economic policies of using government power and credit to foster the productive powers of labor, and defeat the destructive power of Wall Street today, must urgently be revived today.

Green, on the other hand, emphasizes the dangers of misrepresenting Hamilton and abandoning his actual ideas by referencing the kinds of Federal government practices which permitted the 2007-8 financial blowout. That blowout not only cut a swath of destruction through the world economy from which the United States and the world have yet to recover, but dealt a devastating blow to the political system.  Public trust in government and national unity are at a dangerously low ebb as a result.

Green’s elaboration of Hamilton’s theory and practice of public administration are not easy reading, but this is an important book for those looking for a way out of the current political-economic crisis.  In the rest of this review, I single out two aspects of his argument: 1) Hamilton’s actual concept of executive (presidential) power: and 2) some aspects of his concept of political economy.

Executive Power andThe Decision”

Green entitles his chapter on Hamilton’s view on the power of the executive: “Energetic Government as Adequate Means to Republican Ends.” The key idea, he emphasizes, is that the Federal government must be able to cultivate the “productive power of political economy.”

While a strong Presidency is crucial to accomplishing this task (Green calls it “centripetal leadership”), it is not the President’s charge alone. The entire Federal government, Congress and the courts included, is charged with the responsibility to meet this objective. For this reason Hamilton sought longer duration in office for those in the administration, adequate provisions for their support, and competency. Green emphasizes the republican nature of these commitments, including the fact that they envision non-rich people in office. He stresses that Hamilton wanted government employees in the administration responsible to upholding the Constitution, not as simply tools of whoever was President.

New Book Unravels Hamilton's "Energetic Government"

Washington, Jefferson, and Hamilton. (aoc.gov)

But a crucial “decision” was made in 1789 which undermined Hamilton’s concept from the start. That decision, voted up by a small margin in the Congress, declared that, although the President had to consult with the Senate and gets its approval for appointing cabinet officials, he could act alone to displace officers of the government. Green argues that Hamilton did not endorse this view, and that it was the opening shot of a process that ultimately creating the kind of overbearing Presidency which threatens our polity today.

Green cites the presidencies of Andrew Jackson, Teddy Roosevelt, and Franklin Roosevelt as major milestones in advancing the kind of presidential power which is contrary to Hamilton’s outlook.  Under Jackson, the Federal administration was no longer an agency of the Constitution, but of the personal judgment of the President. The prime example he cites was Jackson’s firings of a number of Treasury secretaries until he got one (Roger Taney) who would take U.S. funds out of the National Bank. Under Teddy Roosevelt, the increase in the power of the presidency was ostensibly for “progressive” ends, but moved toward defining the President alone as the “steward of public welfare.” Green sees FDR taking the process even further (a “managerial presidency”), and cites the output of his President’s Committee on Administration Management (the Brownlow Report) as evidence for this conclusion.

I believe the crucial difference between the way FDR wielded strong centralized power, and the way Jackson and Teddy Roosevelt did, lies in the political economic context which each President was seeking to serve. Jackson and Teddy Roosevelt, despite their shrill populist rhetoric, sought to impose economic policies which ran counter to the general welfare, whereas FDR’s policies built up the political economy of the nation. Certainly, much of the opposition to FDR’s measures came from those who opposed Hamiltonian policies to build infrastructure, raise living standards, and impose controls on the most rapacious of Wall Street sharks.

Following FDR’s death, and that of his follower John F. Kennedy, the situation became increasingly dire. Green does not deal with the consequences in terms of continual wars, but hones in on the corruption of the Federal bureaucracy which facilitated the 2007-8 blowout, with all its negative consequences. Such behavior was totally contrary to Hamilton’s policy, both for public servants and for the wealthy.

Hamilton and the Wealthy

Green challenges the standard view that Hamilton favored the dominance of the wealthy elite. Yes, Hamilton wanted to utilize their wealth for public purposes, but he was absolutely committed to subsuming their interests under the public good. Green quotes Hamilton from the Report on the National Bank, as I do in my chapter on FDR, in which he says that “Public utility is more truly the object of public Banks, than private profit. And it is the business of Government, to constitute them on such principles, that while the latter will result, to a significant degree, to afford competent motives to engage in them, the former be not made subservient to it.”

New Book Unravels Hamilton's "Energetic Government"

The first Bank of the United States (Nancy Spannaus)

Hamilton was in favor of directing wealth for public purposes and public benefit, Green argues; thus he favored regulation. Green even moots that Hamilton might have approved a progressive income tax and some of FDR’s direct welfare measures. As Hamilton argued in his Opinion on the Constitutionality of the Bank, he believed that:

The means by which national exigencies are to be provided for, national inconveniencies obviated, national prosperity promoted, are of such infinite variety, extent and complexity, that there must, of necessity, be great latitude of discretion in the selection & application of those means. Hence consequently, the necessity & propriety of exercising the authorities intrusted to a government on principles of liberal construction.

This did not mean that Hamilton thought there were no constraints, Green insists, but that he strongly opposed the kind of narrow thinking asserted by Jefferson et al. on government power.  In my view, the source of that conflict lay, in fact, in different concepts of political economy, not philosophical differences on government power. Jefferson had no problem exercising strong central power when he wanted to (cf. the Louisiana purchase). But Hamilton was strongly in favor of creating wealth through advancing manufactures along with agriculture, while Jefferson stuck with the idea of an agrarian society. Indeed Hamilton sought to destroy the plantation system through his economic program.

But Green points out another aspect of Hamilton’s thinking which is quite thought-provoking, and prescient as well.  He notes that Hamilton anticipated that the success of the American economy might sow the seeds of the demise of republicanism. During the New York State Ratifying Convention, he addressed concerns about the wealthy as follows:

While property continues to be pretty equally divided, and a considerable share of information pervades the community; the tendency of the people’s suffrages, will be to elevate merit even from obscurity. As riches increase and accumulate in few hands; as luxury prevails in society; virtue will be in a greater degree considered as only a graceful appendage of wealth, and the tendency of things will be to depart from the republican standard. This is the real disposition of human nature: It is what, neither the honorable member nor myself can correct. It is a common misfortune, that awaits our state constitution, as well as all others.

This prognostication should certainly resonate with us today.

New Book Unravels Hamilton's "Energetic Government"

Jamie Dimon and JPMorgan Chase’s luxurious headquarters

But Hamilton was not one to sit and await such a dangerous problem to arise. Rather, in establishing his public administration, he sought to create the procedures for curbing the excesses, and channeling wealth for the public good.  He did not specifically anticipate our nation becoming one of consumerism and finance, as it is today, but hoped to erect, if not a bulwark, at least a public life which would sustain  the liberties of the people and a prosperous political economy through public institutions and public morality.

One could not honestly assert that Hamilton was an optimist about succeeding in this effort.  Apparently many of the other founding fathers weren’t either. Green believes most considered the U.S. Constitution, a new phenomenon in the world, to be an experiment that might last a couple generations, at most.  That it has lasted with the degree of success it has for more than two centuries, is a testament to both its framers (Hamilton foremost among them) and the quality of leadership which has come to the fore from time to time, to save us from bad policies, like those threatening to destroy our republic today.

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