Dreams of Alexander Hamilton

One can always quibble with a conservative columnist, but the Good Brooks is out in force today:

When Hamilton was alive, big landowners stifled competition and economic dynamism. Hamilton created national capital markets to smash local oligarchies. When Lincoln was rising, vast distances retarded trade. The Whigs, and later Republicans, championed internal improvements to build national markets. Today, the global information economy makes it hard for people without human capital to prosper and participate.

There are potential Republican responses to this. But right now the message is: Proposals? We don’t need no stinkin’ proposals!

In a really boring structural way, I'd say that the problem here is caused by growing inequality. The Whig-Republican tradition has always been identified with the interests of the owners and managers of large business enterprises. During relatively egalitarian periods, however, the interests of the business elite and of the middle class don't objectively diverge all that much, so it's easy to devise a pro-business agenda that's still relevant to the concerns of a broad mass of people. When the elite pulls away, however, this becomes much harder to do. The Republicans, after all, do all have economic plans -- it's just that their plans all involve changes to the tax code whose benefits would overwhelmingly accrue to a tiny minority of the population.

Meanwhile, tax cut mania renders the brand of Hamiltonian governance that Brooks hankers for impossible by the simple fact that there's no money available. In principle, something like the Shellenberger/Nordhaus view of climate change would be a good initiative for a Hamiltonian political party. But it would cost a ton of money. So a party whose DNA is now 40 percent Muslim-killing and 45 percent tax-cutting just can't do it.

Comments

It's only 5 percent Mexican-deporting? Or rather, 4 percent Mexican-ddeporting and 1 percent all the other stuff (de-regulation, gay-bashing, etc.).

Posted by Nicholas Beaudrot | October 12, 2007 10:57 AM

And of course, the Republicans of the 1860s did enact a lot of radically egalitarian legislation. A graduated income tax (first in US history), inheritance tax, the Morrill Act (establishing land-grant colleges), the Homestead Act, etc.

Posted by J | October 12, 2007 11:00 AM

And of course, the Republicans of the 1860s did enact a lot of radically egalitarian legislation. A graduated income tax (first in US history), inheritance tax, the Morrill Act (establishing land-grant colleges), the Homestead Act, etc.

Not to mention the 13th, 14th, and 15th amendments to the Constitution.

Posted by MattF | October 12, 2007 11:09 AM

"So a party whose DNA is now 40 percent Muslim-killing and 45 percent tax-cutting just can't do it."

Gee Matt,

Comming from someone who threw a fit when someone called him a "leftist", I am stunned you are now calling your political opponents "Muslim Killers." I don't really care if it was sarcasm or not. It crossed the line.

Posted by Dave | October 12, 2007 11:34 AM

but the Good Brooks is out in force today:

Spare me. There is no "Good Brooks," and the belief in one is a testament to the durability (and, I guess, the utility) of Broderism. There is only the Brooks who has opinions that sound amicable to Blue Staters but who reliably supports the craziest of the Red Staters. He's a great weather vane: when things are going well for the Right, he's happy to smack Dems and Blue Staters generally around. When things go sufficiently badly for the Right, he comes up with a column criticizing the Republicans. Hell, he may even believe he's being honest and showing fidelity to his beliefs. But it looks an awful lot like he's just shoring up his position with the people most likely to be in power. At best he's a courtier. I don't think you have to look very hard to notice that this is a pretty persistent aspect of his writing over the last seven or eight years.

But, hey, maybe I'm wrong. Let me know when he goes after the rightmost crazies before everyone else in the country has wised up. Maybe someone will chart the frequency of his Dem-friendly/Dem-kicking columns against Administration or Republican popularity numbers. Maybe he really is a super-awesome fount of independent judgment.

Posted by SomeCallMeTim | October 12, 2007 11:52 AM

Dave --

I don't really care if it was sarcasm or not. It crossed the line of things that offend my personal, arbitrary sensibilities.

Finished your sentence for you.

Posted by Daniel Munz | October 12, 2007 11:53 AM

"When Hamilton was alive, big landowners stifled competition and economic dynamism."

Better to have northern bankers in charge I guess.

They made a handsome profit off that civil war type deal didn't they?

Mr. Brooks' Arch Enemies the big southern landowners didn't do so bad either.

Posted by Linus | October 12, 2007 12:05 PM

MattF wrote: "Not to mention the 13th, 14th, and 15th amendments to the Constitution."

Right, of course ... though I was trying to make the point that CW-era Republican proto-progressivism included a wide range of purely economic issues, not just the more widely recognized antislavery stuff.

Posted by J | October 12, 2007 12:06 PM

Regarding Nicholas Beaudrot's "Mexican-deporting", importing a foreign serf class financially benefits the GOP Captains of Industry that MattY supposedly opposes. See, for instance, the good works of the U.S. CofC. Despite that, useful idiots like Nicholas Beaudrot and MattY assist them in their efforts to profit from cheap labor and help increase inequality in the U.S.

Let me know when MattY decides to be intellectually honest about this issue.

Posted by TLB | October 12, 2007 12:32 PM

It seems like Mat advocates taxes as the "cure": for income inequality-- make the rich poorer.

Supporters of greater tax just assume they have a moral case, but there's a limit there, and a reason that raising taxes is, outside of this narrow group of readers, not popular. What is the specific reason that earned income should be confiscated from some people and given to the ~50% that don't pay income taxes?

Whether you gain wealth by luck (lottery), by hard work, by smarts, by nepotism or by taking risks, you earned it and the person without the wealth didn't have or do one or more of those things. When you tax and transfer, you don't know those answers so you will necessarily act immorally with respect to some.

Etan Thomas is a guy who put a lot of time and effort into playing basketball; he risked a lot by foregoing many other opportunities to focus on the unlikely career in basketball; hopefully he saved his money because he knew options were limited after the typically short basketball career. So why should we take 50% of his money and subsidize someone who squandered educational opportunities, spent instead of saved, refused to take risks, refused to do mind-numbing labor under irritating bosses? Etan needs that money to live the next 40 years of his life, see to his kids' education, etc.

Things were easier when charity was a local affair. Everyone knew who was a shiftless town drunk and who was a deserving widow and gave accordingly. But that's not the case with the Federal govt.

Posted by Béziers | October 12, 2007 12:38 PM

Also worth noting that Hamilton was a huge proponent of the virtues of the national debt and wanted to spend substantial sums of government money on infrastructure.

Lincoln era Republicans were committed to building America's industrial economy and maintaining high protective tarriffs in order to do so.

Will Mr. McBobo be coming out in favor of these ideas?

Posted by Klein's Tiny Left Nut | October 12, 2007 1:08 PM

The other day a GOP congresscritter got a fit because of some nonsensical resolution welcoming celebration of Ramadan. Sometimes I really think that these guys will start shouting "Matamoros!"

Cutting taxes does not have historically recorded battle cries, but who knows, perhaps I should dig deeper.

Nicholas: Matt left you 15% to work with, not 5%. Still, despoiling the environment, homophobia, cutting children off medical benefit and lining the pockets of drug companies (some tension here).

Dave: perhaps giving 25% to Matamoros issues would be more fair? Although my impression is that it was the least contentious point in GOP debates. For taxes, they run gamut from cutting, replacing with a flat tax and replacing with national sales tax.

Posted by piotr | October 12, 2007 1:14 PM

Whether you gain wealth by luck (lottery), by hard work, by smarts, by nepotism or by taking risks, you earned it

Ah, the John Gault Heroic Entrepreneur model again. It has very little to do with reality.

Rich people should pay more taxes because they derive more benefits from particiapting in our society--that's why they're rich. If you don't like it, move to Niger and become a goatherder.

Posted by rea | October 12, 2007 1:18 PM

I really thought the whole point of nepotism was that you didn't earn it.

Posted by daveNYC | October 12, 2007 1:26 PM

"Also worth noting that Hamilton was a huge proponent of the virtues of the national debt..."

Not the virtues of national debt per se, but he thought the federal government should assume the states' Revolutionary War debt, and that this would help unify the country. And the feds did just that.

"Rich people should pay more taxes because they derive more benefits from particiapting in our society--that's why they're rich."

So we shouldn't tax those who come here with wealth? Perhaps the Brits took your silly attempt to rationalize high taxes literally when they decided to exclude from taxation income of foreign residents earned overseas, making London the favorite hometown of global billionaires. The reality is that those who make the most demands on society are at the opposite end of the income scale -- the lion's share of police, social service, free medical care, and other resources go to the poor.

Posted by Fred | October 12, 2007 1:47 PM

Beziers misses the whole point. I feel like everytime I get involved in this discussion we're starting from square one again. Fortunately rea goes right to the crux of the matter.

By the way Fred, I'm not aware of any 'immigration' tax. But once you live here, you start paying taxes on money you earn. Also, the cost to society of provding resources to the poor per person is dwarfed by the benefit per person of being wealthy.

Posted by mpowell | October 12, 2007 2:07 PM

Dave complains: "I am stunned you are now calling your political opponents "Muslim Killers." I don't really care if it was sarcasm or not. It crossed the line."

Crossed the line into complete accuracy, you mean.

With Giuliani, McCain, Romney, etc. climbing over each others' backs trying to out-Cheney Cheney in the Muslim Killing Contest Matt's point was accurate.

Posted by MoeLarryAndJesus | October 12, 2007 2:15 PM

"By the way Fred, I'm not aware of any 'immigration' tax. But once you live here, you start paying taxes on money you earn."

If you live in America, you start paying taxes on money you earn everywhere in the world; in Britain, foreign residents pay taxes on money they earn in Britain; they aren't taxed on income from a businesses they own elsewhere.

Posted by Fred | October 12, 2007 2:18 PM

Earnings shmearnings.

I'd like for Fred or another resident supply-sider to explain what they mean when they say that when government taxes the rich (or anyone else) they are taking what someone has "earned". Do they squeal as loudly about confiscating "earnings" when, say, a large manufacturer is held liable by the legal system when a consumer is harmed by a defective product, even when the manufacturer wasn't negligent?

Increasing tax liability and increasing products liability are both "confiscation of earnings" pure and simple. There are different rationales for each, yet neither of them is based on what any given entity "earns". To talk about tax taking away what someone has earned is circular -- what any entity has earned and deserves to keep is a product of laws, not something you can know by comparing present taxation against some other arbitrarily selected tax regime (which happens to favor the ultrarich).

You can't think of tax in a vacuum. You have to think of tax in context with the rest of our economic system for it to make any sense. In our times, a free market does not operate so as to provide everyone with their just deserts -- the rest of our laws, including tort and criminal law, are mostly responsible for that. A free market is structured so as to incentivize socially useful behavior; we don't have markets because we think any given person is so superior in morality that they deserve to be showered with gifts and exalted above the rest of us. We have markets because they are supposed to make nations wealthier and better off.

In other words, the market is intended to operate so as to maximize overall welfare (something like GDP). A free market anticipates that there will be a tax system that redistributes wealth. That is because pre-tax distributions are joint products of society-wide cooperation and were never intended to remain solely in the hands of the few. When, for example, government invests in corporate R&D, it contributes greatly to the pre-tax income of corporations who benefit from that enhanced productivity. But such cooperation anticipates returns in the form of tax. You can argue over what you think is a fair tax rate, but what you can't do is assume that when the tax collector arrives he is violating their natural property rights or somesuch nonsense.

Characterizing tax as property theft assumes the opposite of all the above -- it assumes the reason we have a market economy is to dole out riches to the best and leave destitute the worst of us. Markets have nothing to do with anything but economic merit, so unless you think the only kind of merit in the world is economic, you'd better have some plan for redistributing that wealth in light of other considerations.

Posted by StJoe | October 12, 2007 2:38 PM

Comparing the GOP of the 1860s to that of today, is, well, dumb.

Also, Brooks is wrong about these people being the "backbone" of the GOP:

"But there was almost nothing that touched concretely on the lives of the ambitious working-class parents who are the backbone of the G.O.P."

Posted by bob | October 12, 2007 2:47 PM

Fred,

Although I agree that Hamilton promoted the debt in part as a means of securing national unity, I believe that he also veiwed it as a means of helping to create a modern bond market and capitalist economy. He already envisioned a continent wide, industrial country of unprecedented size and modernity in the 1780s. Notwithstanding his sometimes appalling elitism, he was a true visionary and an economic thinker of astonishing ability.

Posted by Klein's Tiny Left Nut | October 12, 2007 2:52 PM

1) The praise of Alexander Hamilton by Republicans shows where their hearts lie. Hamilton was the William Kristol of his day -- they even fucking look alike.

2) During the secret proceedings of the Constitutional Convention held here in Philly, Hamilton proposed that the new government be a monarchy with aristocracy just like Britain's -- he even claimed that Britain's government was the "best in the world". As I recall, he proposed that the President serve for Life.

3) It was Hamilton's Federalists who passed the Sedition Act -- making it ILLEGAL to criticize the government.

And even Federalist President John Adams grew nervous over Hamilton's attempt to bypass Adams and conspire with Adam's Cabinet raise an Army --ostensibly to defend against a mythical French invasion but in reality to exterminate Jefferson/Madison's new Democratic Party.

4) And of course Hamiton emulated the Republican chickenhawks of today -- he made much of being in the COntinental Army after the war but he spent much of the war working as a secretary for George Washington, not on the battlefield. While Southern militias were risking their lives to fight Cornwallis, Hamilton resigned his commission to go practice law in New York.

5) George Washington Himself rebuked Hamilton for stirring up the Newburgh Mutiny -- for encouraging the Continental Army officer Corps to plot the overthrow of Congress.

Posted by Don Williams | October 12, 2007 3:02 PM

Left Nut,

Hamilton was a "true visionary and an economic thinker of astonishing ability." That's true. It's also true that a secondary and positive result of the federal government assuming the Revolutionary War debt was the birth of the bond market. I don't know about his "elitism" -- he came from a humble background himself. If anything, his capitalist vision of America (which has largely come to pass) offers far more social and economic mobility than the agrarian gentlemen-farmer economy envisioned by Jefferson and other founders.

I'm not so sure that Hamilton thought that debt was great in and of itself. The debt was incurred by necessity, and he thought of ways to handle it that proved beneficial to the country.

Posted by Fred | October 12, 2007 3:11 PM

"A free market is structured so as to incentivize socially useful behavior"

Really? Who decides what behavior is "social useful"? Do you consider Britney Spears's videos to be "socially useful"? What about Ann Coulter's books?

Posted by steve | October 12, 2007 3:21 PM

Fred,

Despite being illegitimate (and from the Carribbean) Hamilton was inarguably an elitist. See Don's post above.

Don,

I think that Hamilton had a number of flaws, but I don't think his physical courage in battle was ever in doubt. He served as Washington's aide de camp because Washington valued him and wanted him around and not dead -- he wrote a great deal of what is attributed to Washington. Hamilton wanted to fight, if sometimes for motives of ego more than nobility. Calling him a chickenhawk is way off base. Indeed he stood in the fire with Aaron Burr and did not flinch.

Posted by Klein's Tiny Left Nut | October 12, 2007 3:39 PM

Though I buy Matt's notion of the "good Brooks" at work here, the history's way askew. Does Brooks really think that "Hamilton created national capital markets to smash local oligarchies"? The more common interpretation of Hamilton's financial policies is that they were designed to stabilize oligarchies by giving them something besides risky western real estate in which to invest their surplus capital--and in the process buy their loyalty to the nation. He'd seen his mentor Robert Morris land in debtor's prison by losing his shirt in land speculation. Moreover, his chief concern was not expanding access to enterprise, but shoring up what was still a weak, less-developed country, and his model of what a strong country was--Britain--was hardly a populist model. TBS, by creating the first central bank and the first class of trusted securities in American history, he made the first capital markets possible (though I think they invented themselves once there was stuff to trade), and they would greatly benefit the nation in the long run. But in fact those upwardly-striving middle-class Americans Brooks so prizes threw in with Jefferson, not Hamilton. Small businessmen and local bankers resented the conservative lending and monetary policies of the BUS; small manufacturers disliked the fact that he was more concerned about using tariffs for revenue than for protecting them from cheap British goods. Hamilton made some critical contributions to our business institutions and culture--but a populist he most surely was not.

Posted by David | October 12, 2007 4:18 PM

1) The Revolutionary War bonds -- held by the common citizens and Continental Enlisted -- were practically worthless. Hamilton announced he was going to have the Treasury redeem them at FULL FACE Value --but he tipped off his wealthy friends months in advance so that they could buy them up at 5 to 10 cents on the dollar. His wealthy father-in-law made a killing.

2) Congress went along with the scam -- Historians decades later discovered that a bloc in Congress had also bought up a lot of the bonds and were in on the scam.

3) Then Hamilton levied an alcohol tax on the corn whiskey made by dirt farmers in order to raise revenue to pay the bondholders. Then Hamilton led a military expedition into western Pennsylvania to threaten and kill the farmers after they rebelled at the screwing they were getting.

4) Hamilton liked manufactures --like textile machinery --because it made it possible to use cheap child labor -- see p. 26 of Charles Beard's "An Economic Interpretation of the Constitution."

Posted by Don Williams | October 12, 2007 4:59 PM

Don,

I wasn't making the case that Hamilton was the progressive's beau ideal. Simply that he was 1) physically courageous and 2) an economic visionary. Of course with respect to the latter point, so was, say, Henry Ford, but it didn't make him a nice guy either.

Posted by Klein's Tiny Left Nut | October 12, 2007 5:48 PM

Béziers: "Things were easier when charity was a local affair. Everyone knew who was a shiftless town drunk and who was a deserving widow and gave accordingly. But that's not the case with the Federal govt."

Digby: "And this impulse (which is not confined to the right although they're the ones who seem to make a fetish of it --- at least since the temperance movement ran out of gas) is why government programs were developed in enlightened, modern Western societies in the first place. Charity robs the recipient of the dignity and personal liberty to which all people have a claim, rich, poor or in the middle. Using government to act as the safety net instead of the good will (or good mood) of those of means allows that. Citizen pays in, and someday, god forbid, if he needs some help, he won't have to kiss the ass of some rich busybody or self-righteous hypocrite who thinks he or she has a right to dictate his behavior on the basis of a couple of bucks. (And considering the moral example set by both the private and public scolds these days, that concept is even more distasteful than it used to be.)

Posted by Dan S. | October 12, 2007 5:56 PM

steve: to answer your question, the Commission on Social Usefulness decides what is socially useful.

What do you think? Consumers decide what is socially useful by paying for things, hence things that get paid for are incentivized. Economists tend to assume that people value what they pay for (i.e. what they find useful) precisely because a Commission on Social Usefulness is a disturbing, tyrannical idea inappropriate for a society in which people disagree about the utility of different goods and services. Hence our economy is, again, structured so as to incentivize the socially useful by having consumers pay for what is useful for them and thereby encourage producers of such goods to keep making them. This theoretically leads to maximization of consumer preferences...

Meanwhile, our courts and elected lawmakers are also in this strange business of promoting the useful and deterring the harmful through wealth redistribution (e.g. all kinds of tax credits, cushy capital gains rates, liability for setting fire to your neighbor's house, etc.) because the market is not all-powerful.

The point of all this is to remind you that once again, when you tax, you're making an adjustment to wealth allocations based on social welfare concerns -- a continuation of the same project our market is designed to contribute to. I don't see this as controversial. It's a banal point: our economy is designed to make the nation wealthier. If it is failing to achieve that goal in some way, we have plenty of other primary tools.

Posted by StJoe | October 12, 2007 9:57 PM

Dan S., great excerpting especially given the SCHIP drama. Do we really want safety nets and guarantees of a bare minimum standard of living to be contingent on the whims of out-of-touch patrons who at this point seem perfectly willing to judge and chastise ordinary Americans for their dire straits? The experience of the Frost family tells me no.

Posted by StJoe | October 12, 2007 10:08 PM

If Republicans' priority is "40% Muslim-killing" as Matt claims, they better be careful since George Bush might be in a mosque again, preaching about how American Muslims are an integral part of this country.

I venture back to this site from time to time, thinking maybe Matt or his commenters have some interesting views that will provoke some thought. And then I read one of his infantile, hate-filled posts like this one.

Matt, you really need to get to know some Republicans before you opine about them.

Posted by ERF | October 15, 2007 7:59 AM