How Alexander Hamilton Screwed Up America
Regnery History, 2017, 205 pp.
By Nancy Spannaus
Oct. 26—The radical free-marketeers of the Austrian School of Economics are very unhappy. The dismal results of their dominance of world economic thought since the end of World War II have finally resulted in a global backlash, and the emergence of the embryo of a clearly successful model of economic growth centered on a strong state model in China, and its Belt and Road program. Equally alarming has been the appearance of a new nationalism in Europe and the United States which has the potential to revive the highly successful Western model of technological progress of the past.
In the United States, that model is synonymous with the name of our first American System economist, and Treasury Secretary, Alexander Hamilton. While his policy outlook has been virtually written out of U.S. Federal government policies over the last decades, there is once again a revival of interest in his accomplishments and ideas. Enter Brion McClanahan, with his doctorate in American history, who authored this book trashing the brilliant Hamilton.
The young McClanahan is a favored author of the Ludwig von Mises Institute, the political-ideological center of the Austrian School here in the United States. He has written five books before this one, all with a strong polemical bent against “political correctness.” He proudly identifies with the intellectual current represented by his PhD mentor Clyde Norman Wilson, a leading scholar on John Calhoun, and from “Jeffersonian” groups such as the Southern Partisan and the League of the South. He unabashedly advocates regionalism and secession, in order to restore what he considers the true federalist system established in the Constitution.
McClanahan’s argument can be summarized succinctly. He claims that Hamilton’s concept of an American nation being embodied in the U.S. Constitution was a “lie,” and that by conniving and manipulating others, such as President Washington, to follow his lead, he set the United States out on the path of a strong central government. Then, McClanahan claims, Supreme Court Chief Justice John Marshall, Associate Justice Joseph Story, and Justice Hugo Black used Hamilton’s arguments and ideas to turn the Supreme Court into an enforcer of these ideas. And it is this “unconstitutional” Federal power à la Hamilton’s idea, he claims, which is responsible for all the ills of the United States today—from illegal wars, to cultural decline, and economic degradation. The remedy, he says, is to expose Hamilton’s lies and restore power to the states.
To make his point, McClanahan engages in extensive quotations from the debates on the Constitution (although many of these are obviously inexact), Hamilton’s papers, and court decisions by his followers. The intent is to try to prove that the Federal government’s exercise of overarching authority in economic and juridical matters (the supremacy clause of Article VI notwithstanding) was illegitimate. Nationalism is a “myth,” and no sense of nationhood guided the Constitutional Convention, he argues, and thus Hamiltonian John Marshall was wrong in his argument upholding the Second Bank of the United States’s exemption from state taxation, for example The sovereign states are the fourth branch of government, and must be protected from Federal power.
Clearly, there was a gradation of views at the Constitutional Convention and the ratifying conventions on the question of the powers of the Federal government vis-à-vis the states. But the outcome of those arguments was a victory for moving from a confederation (which is what McClanahan wants) to a constitutional republic, a nation. McClanahan acknowledges that there was tremendous fear that the assertion of states’ rights would lead to disunion and war. But “what if nationalism and not states’ rights led to the destruction of the Union in 1861 and the resulting political misery of the last 150 years,” he asks. Indeed, that is what he asserts.
Who Created Prosperity?
But here it is McClanahan who is lying. If Hamilton and Washington’s idea of the nation, bound together with infrastructure, a common concern for the general welfare, and constantly improved economic ties, had actually prevailed against the “Jeffersonian” opposition, the United States would have been spared not only the Civil War, but a plethora of other evils as well. As it happened, it has only been when “Hamiltonians” held power in Washington that the standard of living of the population and human rights have been improved.
The instances are too obvious to be enumerated, but, given McClanahan’s Southern bent, perhaps the Tennessee Valley Authority of Franklin D. Roosevelt (one of McClanahan’s targets in another book) provides a good example of what benefits Hamiltonian nationalism have brought to the nation. A huge area spanning seven states was lifted from a condition of chronic disease, floods, and misery to that of a leading agricultural and industrial center, thanks to this Federal government infrastructure initiative.
Hamilton and his ideas created financial corruption? So McClanahan asserts, simply airbrushing the autocratic bosses of the states out of the picture. He even excoriates Hamiltonians on the Supreme Court for insisting that states enforce the civil liberties in the Bill of Rights, on the grounds that the sovereign states should be able to do anything they want.
It is a hallmark of the Austrian school to insist that “freedom” from state control represents the key to happiness and prosperity for the population, when in fact the energetic exercise of power by a Hamiltonian-style nation state is required to create that happy condition. Von Hayek and von Mises point us back toward feudalism—not unlike the plantation system which so many anti-Federalists championed at the time of the founding and before the Civil War. McClanahan and his sponsors seem to pointing us in the same direction.
Alexander Hamilton, on the other hand, had a vision of a modern, technologically-proud nation state, and helped create a Constitution which provided the tools to create such an entity. For a human future, we had better choose Hamilton.
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