Concrete Economics: The Hamilton Approach to Economic Growth and Policy

February 16, 2016 6:28 PM

Why Hamilton—Not Jefferson—Is the Father of the American Economy - "How we can better energize America's economy, create more jobs, and provide more fulfilling lives for our citizens?" By Stephen Cohen and Brad DeLong (previously; [unfinished] book preview)

Because what we're doing now isn't working...
How the United States built a welfare state for the wealthy - "The United States government spends more on social welfare programs per capita than most European countries once we include both traditional public spending and tax subsidies. But contrary to European welfare states, benefits are not concentrated on the poor in the U.S." (via)

also btw...
-How the Monkey Cage Went Ape
-SRW: "The most entitled people in the world refer to what the least entitled get as 'entitlements.' "
-"Building the world's most open and diverse social democracy would be an exceptional American project. Could Sanders' 'democratic socialism' be that?"
-Key quote: "The public has concluded that our 20th century institutions are incapable of dealing with 21st century challenges."
-"Blue states subsidizing public goods while red states free ride, as usual..."

Evonomics: another approach...
-My Journey to Economic Mordor, and the Woman Who Saved Us
-The Search for a Better Economics
-Is This the Future of Economics?
-Why the Economics Of "Me" Can't Replace the Economics Of "We"
-What Liberals and Conservatives Need to Know About the Welfare State
-Why Economists Ignore Much of Rich People's Income
-Why Economists Don't Know How to Think About Growth
-How 10,000 Years of War Made Humans the Greatest Cooperators on Earth
-The Invisible Hand Won't Solve the Climate Crisis

posted by kliuless (23 comments total)

Hamilton vs. Jefferson, you say?

"If we assume the debts, the union gets
A new line of credit, a financial diuretic
How do you not get it? If we’re aggressive and competitive
The union gets a boost. You’d rather give it a sedative?"
posted by lunasol at 6:49 PM on February 16, 2016 [10 favorites]

(This is an amazing post, by the way. Really excited to dig into these links)
posted by lunasol at 6:50 PM on February 16, 2016 [2 favorites]

Also, this is a pretty decent explainer about Jefferson and Hamilton's perspectives on assumption of states's debts.
posted by lunasol at 6:54 PM on February 16, 2016 [2 favorites]

Hamilton's basic tax plan was "Sell America's debt to the Rich at a song and they'll have incentive to support a strong national government with enough muscle to make sure the country does not collapse."

The upside is that he was absolutely correct. The downside is the consequences of his being absolutely correct.

Also: FWiW, The revenue for funding this economic system was to come partially from a Tariff disadvantageous to Southern aristocrats and a per-gallon excise tax on spirits that targeted Western farmers. (The East coast distilleries could buy a distillation-license "opt-out" for a relative pittance).
posted by absalom at 7:01 PM on February 16, 2016 [3 favorites]

Every time I listen to the Hamilton soundtrack and get to his time as Secretary of the Treasury, it throws me off. Waitaminute, our hero is about to save the country by... letting Wall St get their hooks in?
posted by thecjm at 7:33 PM on February 16, 2016 [4 favorites]

Wall Street is a fine idea so long as you remember to groom at least one of your sons to get a job there, which isn't really that hard if you send him to Harvard, Kings College or Princeton. If nothing else your alumni status should make up for any educational slacking off, and then boom, your family is on the inside track for another generation.

Come on, it's almost like you're not a rich white guy.
posted by GameDesignerBen at 7:44 PM on February 16, 2016 [4 favorites]

Seriously we should just ...ignore everything Jefferson said that would be great

"this country should be built on small holding farms under local small independant governments!" "Why?" "My imperfect understanding of how anicent Greece worked!" "Okay well, are you good at things?" "Lol no I've literally failed at everything I've ever done and I'd be destitute with slavery"
posted by The Whelk at 8:19 PM on February 16, 2016 [31 favorites]

Just a supplementary reference here: Michael Hudson's book, "America's Protectionist Takeoff, 1815-1914--The Neglected School of American Political Economy" goes a long way towards exploring Hamilton's influence. While not explicitly about Hamilton, it isn't difficult to see his impact on these later thinkers. Nice blog post about it here.
posted by CincyBlues at 9:03 PM on February 16, 2016 [1 favorite]

Lin-Manuel Miranda needs to write a follow-up musical about the Notorious JQA, casting Jay Z in the role and with Paul Giamatti as his dad.
posted by Slap*Happy at 9:08 PM on February 16, 2016 [4 favorites]

Seriously we should just ...ignore everything Jefferson said that would be great

I mean he did draft the Declaration of Independence, although he didn't exactly live it, which is about as far as I'm able to go in defending the guy.
posted by zachlipton at 9:21 PM on February 16, 2016 [2 favorites]

Seriously we should just ...ignore everything Jefferson said that would be great

But I like Louisiana...
posted by Cool Papa Bell at 9:27 PM on February 16, 2016 [6 favorites]

Yes, we get it, everyone loves Hamilton. I hear they're going to swap out Franklin on the $100 and have Hamilton on everything.
posted by GuyZero at 11:12 PM on February 16, 2016 [3 favorites]

Yes, we get it, everyone loves Hamilton. I hear they're going to swap out Franklin on the $100 and have Hamilton on everything.

We should keep the portraits of the other guys but have Hamilton, like, photobombing each one in the background.
posted by AdamCSnider at 3:37 AM on February 17, 2016 [21 favorites]

People are down on Jefferson these days, and not without reason, but ... The Declaration of Independence, the Bill for Establishing Religious Freedom, statutes providing for general education, pardons of people imprisoned under the Alien and Sedition Acts, ordinances banning slavery (yeah, he did that, too) ...

In short, Thomas Jefferson is a land of contrasts.
posted by kyrademon at 4:03 AM on February 17, 2016 [14 favorites]

At least we're clear that if Jefferson doesn't have the answer to our economic problems then it has to be Hamilton.
posted by Segundus at 4:54 AM on February 17, 2016 [5 favorites]

This question was decided when the $2 and $10 bills were issued.
posted by Atreides at 7:45 AM on February 17, 2016 [1 favorite]

Waitaminute, our hero is about to save the country by... letting Wall St get their hooks in?

context is important!* if you follow the land --> capital (--> attention) arc wrt economic scarcity, means of production and wealth of nations, the US was just setting out on the path of industrialization against the interests of perhaps 'enlightened', but still atavistic agrarian feudalism. as cohen and delong point out, the particular institutions of industrial nationalism -- like the national debt -- that hamilton helped found happened to be suited to the interests of capital and the process of industrialization, which was by no means assured at the time:

These benefits were massive. They were also massively unexpected. Hamilton believed that a focus on manufacturing, technology, secondary-product exports, corporate organization, banks, and finance was a very good bet. But he and his allies had no idea how good a bet it would be. Nobody did.

nowadays, big corps and wall st aren't looking so good, but at the time they represented progress and development. so the question now is what does (represent progress and development)? if you think that the benefits of industrialization and bank finance have run their course and we're seeing diminishing returns -- global warming, financial crises, economic instability, etc. -- what organizations and institutions are being founded to adapt to the times (against the interests of the old industrial state)?

I hear they're going to swap out Franklin on the $100 and have Hamilton on everything.

It's time to kill the $100 bill :P

also btw...
-Kill the €500 note, weaken the euro
-Can a central bank eliminate its highest value banknote?
posted by kliuless at 10:50 AM on February 17, 2016

And we segue into the war on cash.
posted by GuyZero at 11:09 AM on February 17, 2016 [1 favorite]

Great post! I'm a big Brad DeLong fan.

If you haven't seen Jefferson's paragraph on slavery he cut from the Declaration, do.
posted by persona au gratin at 11:35 AM on February 17, 2016

I'm just here for the musical theatre jokes.
posted by Theta States at 11:39 AM on February 17, 2016 [3 favorites]

"In short, Thomas Jefferson is a land of contrasts."

Thomas Jefferson is both kind of a genius (great writer, swivel chair and other inventions, knew a fair chunk of languages) and kind of a complete idiot (hoo boy, did he suck at money, pretty much did whatever Madison told him to most of the time, slavery, chasing married women, trusted James Callendar) at the same time.

Land of contrasts, indeed.
posted by jenfullmoon at 9:43 PM on February 17, 2016

We should keep the portraits of the other guys but have Hamilton, like, photobombing each one in the background.

I mean, if photobombing were a thing that existed in the 18th century, I'm pretty sure A. Ham would have been the king of it. Relatedly, can you imagine the twitter wars?
posted by lunasol at 11:18 AM on February 18, 2016

Theta States: I'm just here for the musical theatre jokes.

Yeah, same. I know I should be satisfied with the reference upthread, but if I could just have a few more that'd be enough.
posted by flatluigi at 6:28 AM on February 19, 2016 [1 favorite]