Hamilton (The Misunderstood)

Welcoming visitors to the U.S. Treasury Building’s columned entrance, which faces Pennsylvania Avenue on the green edge of the National Mall, is a statue of Albert Gallatin. A Swiss-born sophisticate who was dandled as a child on Voltaire’s knee, Gallatin served as the nation’s fourth treasury secretary, first under Thomas Jefferson and then under James Madison. His statue was erected in 1947. For sixty years, Albert Gallatin has been represented as the founding father of the Treasury Department.
Behind the building stands Alexander Hamilton. The first treasury secretary, Hamilton was for all practical purposes the creator of modern American finance and the founding wealth of the United States. This is, by rights, his house, and he’d be horrified to see his mortal enemy, whom Hamilton once tried to hang for treason, lording over its entrance while his own likeness is consigned to its back end.
Hamilton’s weakened position came partly from changes in city planning: the original front is now the back. But Gallatin’s symbolic prominence is no accident. The move to erect the statue began during the New Deal, when the Democratic Party was carrying on a romance with all things Jefferson. Great Depression–era Democrats identified the true founding not with the first election of 1788 but with that of 1800, when Jefferson’s party beat Hamilton’s, whose legacy New Dealers condemned as elitist and anti-democratic. There is rich irony, of course, in New Deal Democrats’ claims on Jefferson, who objected to Hamilton’s policies precisely because they relied on federal activism and central economic planning—approaches to government that FDR took to extremes. The party in power nonetheless busied itself with carving Jefferson’s face on the nickel and on a mountain, building him a big white memorial as opulent as Lincoln’s and Washington’s and, for decades in both public and academic history, pushing his reputation at the expense of Hamilton’s. The injustice at the Treasury doors is only the lowest blow in a long fight to take Hamilton down.
Now, a Hamilton revival is not only under way but an accomplished fact. Wrestling anew with Hamilton’s contributions to national politics and economics could be both fascinating and worthwhile. But Neo-Hamiltonians, like the latter-day Jeffersonians of the ’30s and ’40s, have been eagerly chopping up the past to make it conform to their political aims. Hamilton’s national vision and founding economics are far more troubling—and therefore more compelling—than his promoters acknowledge. And because Hamilton’s legacy is being invoked as a beacon for current policy, the emerging picture is a dangerous one.
The rehabilitated Hamilton was first presented to general readers in two biographies, Richard Brookhiser’s Alexander Hamilton: American (1999) and Ron Chernow’s best-selling tome, Alexander Hamilton (2004). The authors share a thesis: today’s America is not Jeffersonian but Hamiltonian—a blend of high finance, central banking, federal strength, industrialization, and global power for which we are indebted to the rare imagination and existential derring-do of our founding treasury secretary. “The Man Who Made Modern America” is how Brookhiser put the argument in the subtitle of an exhibit he curated for the New-York Historical Society in 2004. Short on substance, long on projecting gigantic videos of such things as modern bridges and contemporary military training, and full of relentlessly one-sided portrayals of Hamilton’s critics as driven by myopia and animosity, the exhibit was lavishly produced and promoted as a blockbuster.
This year, Hamilton crossed all the way over to pop. The once “forgotten founder” is now the subject of a PBS American Experience feature, which aired in the spring and is likely to live on in classrooms on DVD. Between scenes of bewigged actors reciting their characters’ written prose in awkward soliloquy, Chernow and a raft of other historians relate an even more vaulting story than those told in the exhibit and the biographies. Some of the talking heads give Hamilton virtually sole credit not only for founding the American financial system, but for the country’s very nationhood.
There’s a wonkish side to the Hamilton revival too. Certain policy writers, way ahead of the curve, have been contributing to its torque, shooting Hamilton’s legacy past history buffs and toward the halls of power. In 1997 David Brooks and William Kristol published a Wall Street Journal op-ed making an early case for what the authors called “national-greatness conservatism,” a theme they’d been developing in articles for the Weekly Standard, which Kristol helped found and where Brooks was senior editor. Looking for activist-government leaders that Republicans could love, they came up with Teddy Roosevelt, Henry Clay, and Alexander Hamilton—anything but bleeding-hearts of what Brooks and Kristol called “the nanny state”—who nevertheless saw an important role for the federal government in setting and achieving ambitious national aims at home and abroad.
Since then, as Brooks has become a New York Times columnist and TV pundit, he’s pressed the theme that Hamilton personifies national-greatness conservatism. In a major essay in the New York Times Sunday Magazine in 2004, he described Hamilton as author of a conservative tradition favoring limited government activism in service of social mobility and national unity. That same year he raved up Chernow’s biography in the New York Times Sunday Book Review. Indeed, pairing the national-greatness theme with Hamilton grew more intense after September 11. For the swearing-in of Treasury Secretary Henry Paulson in 2006, President George W. Bush’s speechwriters went out of their way to note the importance of Hamilton’s legacy, and Paulson himself remarked that his father had been “a real Alexander Hamilton fan.” The Hamilton cause drew financial support—for both the Historical Society exhibit and online components of the PBS special—from the Gilder-Lehrman Institute for American History, whose founders Richard Gilder and Lewis Lehrman have backgrounds in such conservative organizations as the Club for Growth and the Project for the New American Century.
Neo-conservative claims on Hamilton came to a head when Brooks, in a June 8 New York Times column on economic issues in the 2008 election, announced outright that he and like-minded others were “Hamiltonians,” who hold the rational balance among radical populists, tinkering liberals, and knee-jerk anti-government conservatives.
Hamilton’s reputation has bloomed on the liberal side, too, with the Brookings Institution’s “Hamilton Project,” which is dedicated to proposing “pragmatic policy responses that will create new opportunities for middle class affluence, bolster economic security, and spur more enduring growth.” Emphasizing Hamilton’s immigrant status and impoverished background, the project describes Hamilton as a representative of American traditions of opportunity and upward mobility. “Broken Contract,” a widely discussed paper by the project’s policy director, Jason Bordoff, published in the September issue of Democracy, sets out an agenda clearly inspired by this vision of Hamilton. An essential promise of American democracy—families who work hard and prize education can expect their children to advance economically—is in danger of being broken, Bordoff argues, but the extreme solutions coming from the left and the right will fail. He proposes instead maintaining mandatory forms of social insurance, making heavy investments in training and education, and increasing individual responsibility. The Hamilton Project’s advisory council boasts Democratic Party luminaries such as Robert Rubin, Roger Altman, and others redolent of both the Clinton-era pragmatism and New Deal liberalism espoused by Bordoff.
That the Hamilton revival admits conservatives and liberals alike gives it obvious appeal. But if opinion-shapers really want to strengthen democracy by enhancing competition, opportunity, and mobility, Hamilton is not their man. Nor did he want to be. Neo-Hamiltonians of every kind are blotting out a defining feature of his thought, one that Hamilton himself insisted on throughout his turbulent career: the essential relationship between the concentration of national wealth and the obstruction of democracy through military force.
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That’s putting the matter bluntly, and bluntness is necessary. Time and again this galvanizing principle in Hamilton’s political life has been denied, ignored, and glossed over by his proponents, who thereby risk distorting the entire founding period. One can gain a refreshingly focused picture of Alexander Hamilton simply by looking at episodes in his public life, far from minor, that the rehabilitation industry’s guiding storytellers have done their best to downplay or leave out all together.
Among the most revealing of these was his participation in the dramatic events known as the Newburgh Crisis. Passed over in silence by the PBS biography, this affair launched the mature stage of Hamilton’s relationship with George Washington and placed him for the first time at the center of public finance. As such, it was nothing less than a profoundly formative experience in Hamilton’s life as a political actor.
In 1782, fresh from serving as a battalion commander at the Battle of Yorktown, Hamilton, 27, joined the Confederation Congress as a delegate from New York and entered into a scheme to threaten the Congress with a military coup. As executed by the Congress’s superintendent of finance (and Hamilton’s finance mentor), Robert Morris, his assistant Gouverneur Morris (no relation), and Hamilton (their promising young protégé), the idea was to encourage Continental Army officers—deployed, after victory at Yorktown, in a cantonment at Newburgh, New York—to refuse to lay down their arms unless the states acquiesced in Robert Morris’s longstanding insistence that the Articles of Confederation be amended to permit the collection of federal taxes from the whole American people. In Morris’s plan these taxes, collected not by weak state governments but by a cadre of powerful federal officers, would be earmarked for making hefty interest payments to wealthy financiers—including Morris himself, along with his friends and colleagues—who held millions of dollars in federal bonds, the blue-chip tier of domestic war debt.
The first tax Morris wanted Congress to pass was a duty on foreign goods, known then as an impost. Both Chernow and Brookhiser focus exclusively on the impost, but Morris assured his supporters that once Americans were accustomed to paying federal tax, a slate of land taxes, poll taxes, and taxes on domestic products would soon follow. The idea, in Morris’s phrase, was to “open the purses of the people” in order to enrich the interstate investor class, place American wealth in a few powerful hands, and create a unified nation poised to become an empire.