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A Further Perspective
Rediscovering Hamilton — and Hernando de Soto
The non-development of the developing world can lead to Hamiltonian conclusions.
An extramarital affair he confessed to in print destroyed whatever chances Alexander Hamilton might have had to run for president, but it did not destroy his marriage.
His devoted wife Elizabeth (notwithstanding; and the feeling was mutual), who outlived him by half a century, was the principal keeper of his reputation, his legacy, and his honored place among the Founding Fathers of the American Republic. The Christian faith was made of sterner stuff then, and for that reason the concepts of repentance and forgiveness ran deeper, as did those of damnation and sinfulness. Hamilton had little interest in the perfectibility of man or the creation of a good society. He did not expect such things to happen.
Illegitimate, abandoned by his father, orphaned, working full time in his early teens in an outpost of the British Empire — the Virgin Islands — Hamilton was no romantic about the human condition or the chances of improving it by means of idealistic social engineering. He was a statist — a big government conservative, to use an anachronism — not because he thought the state could or should make people happy or virtuous, but because he viewed human beings with a caustic eye and thought only a strong central government could impose the modicum of order needed to prevent the relapse into the state of nature — the jungle — toward which men are drawn.
He would have agreed with one of Adam Smith’s most famous aphorisms, “When two men of commerce meet, you may be sure they are conspiring against the public good.” And for this very reason, like Smith, he believed you needed to let commerce flourish, and the goal of political economy is to set up rules, frameworks, in which the flourishing takes place, with the greed and cunning of the many economic actors cancelling one another out in a perpetual search for self-improvement and, thereby, wealth creation.
The experts will correct me if I am wrong, but Adam Smith never wrote about political regimes as such. Hamilton, of course, as one of the authors of The Federalist, was one of the great political thinkers of modern times. He took an active and profound interest in the kind of political system the newly independent Colonies would produce. To revert again to a deplorably facile anachronism, Smith was a libertarian, though no Randian — his Moral Sentiments makes that clear — while Hamilton sought a balance between Colbertian mercantilism and free trade.
Hamilton was not an abstract thinker. Whatever works, works. He wanted a powerful United States, whose grand destiny he foresaw, and he was not against mixing government intervention with laissez-faire. In a quite brilliant movie (reviewed Monday by James Bowman) about the great man’s life, Rediscovering Alexander Hamilton, Michael Pack and Richard Brookhiser arranged for a number of modern-day experts and interested parties to comment on Hamilton’s economic and financial ideas, and the consensus that emerges is that he was definitely an interventionist and a big government man. The federal government’s response to the financial crisis of ‘08, the various experts (academics) and interested parties (investment bankers) agree, was Hamiltonian.
The young United States in the late 18th century was, basically — to use still another anachronism — the Third World. We were a poor, under-developed country, sparsely populated. Most Americans were farmers. The Jeffersonians believed there was something virtuous about an agriculture-based economy. It is not clear to me why they felt this way, especially when you consider that the rural economy they knew was based on slavery, which in practical terms meant: kidnapping, murder, forced labor, sexual exploitation. I understand this has to be seen in context. I understand slavery is a historical fact in many societies, and we Americans, in historical perspective, probably dealt with it as well as any other sinful humans bound together in a political entity understood to be a work in progress.
What I mean, though, is that in the great debate between the Jeffersonians and the Hamiltonians in the early years of the Republic, the latter seem to have been much colder-eyed and, in a word, honest. Hamilton himself was an anti-slavery man, though he did not think it should be a deal-breaker — still another anachronism — when it was time to forge a more perfect union. He was not sentimental, politically. Personally, he was, and it finally doomed him.
Jefferson tended toward sentimentalism, until he had the responsibility of power, at which point he turned into a real-politiker: a Voltairian, to the immense benefit of his country. But you see the influence of Rousseau and the romantic ideas of the 18th century in his personal life and in his foreign policy ideas. He placed love above marital convention, would not think of apologizing. He was thrilled by the French Revolution, whereas Hamilton almost immediately understood its essential difference from — and challenge to — the American one. I hate it when I sound French, but I cannot resist saying that the political history of the modern world is a seesaw between people inspired by the American Revolution and people inspired by the French Revolution. I thought it was all over with the fall of Soviet communism, but it is not. As Secretary of State, Jefferson urged George Washington to pursue an interventionist, war-risking foreign policy. Hamilton, who was Secretary of the Treasury, asked: What’s in it for us?
Richard Brookhiser, who has written superb biographies of George Washington and Alexander Hamilton as well as other major books on American history, appears in Rediscovering Hamilton as straight man. He asks a marvelous variety of individuals, ranging from incarcerated female prisoners on the Virgin Islands to gang members in Baltimore, passing by Ron Chernow of Princeton University and the French belle-lettrist and warhawk, Bernie Lévy, just what is Hamilton to us today. And what emerges is this: we are all Hamiltonians. We may disagree with him — the gang members, for example, lacking his Christian scruples, thought he was a fool not to shoot Aaron Burr when he could have — but we are all children of Hamilton to the degree we are the legatees of the great commercial and free Republic he imagined and whose basic ground rules he invented.
The trick to being a good legatee, of course, is to know when you should tinker with the inheritance, and how much you should tinker.
BY SHEER LUCK, I saw Hernando de Soto the afternoon before I went to see Rick Brookhiser and Mike Pack for the Hamilton premiere. Hernando de Soto understands Hamilton very well. His work on the reasons for the non-development of the developing world led him to Hamiltonian conclusions. The key issue in the developing world, Hernando de Soto says, is invisibility. People are invisible, in the sense that legally, they and their property do not exist. The informal sector, in much of what used to be called the Third World — the polite word now is “south” or “developing world,” but much of the south is right here in the north, and as to developing world, it is in fact not developing, so why lie about it? — is larger than the formal sector. But without enforceable property rights because of the prevailing invisibility, the energy of all those hardworking people goes to waste. Or at least it is underused.
Hernando himself, I might note, is anything but invisible. Quite apart from his charm and fluency in several languages — one of which is English — he is only too visible to the ultra-statists, the terrorist descendants of the French Revolution. In his native Peru, where they go, or went, by the name of Sendero Luminoso, Shining Path, they tried to kill him. At the Americans for Tax Reform where Grover Norquist was hosting him last week, I thought I noticed at least one bodyguard. It could have been my hypersensitivity, however.
Though some of its apparatniks survive to this day in the murky world of politically tainted South American narcotrafficking, the Shining Path — officially, the Communist Party of Peru or some such fantastic name — was defeated in the 1980s and early 1990s by a combination of liberal economic ideas inspired by Hernando de Soto and the strict law-and-order policies of President Alberto Fujimori, whose daughter is a candidate for president in the forthcoming Peruvian presidential election, against a standard-issue socialist soldier. (In Peru the military traditionally goes left.)
The combination of law-and-order and property-law was remarkable and successful in Peru. The people who became visible by entering a legal system with rules (contracts) were not asking for charity — manna, cargo, foreign aid — only the chance to work and prosper, which is what Alexander Hamilton, the orphan boy from the West Indies, came to New York to do and what the overwhelming majority of our immigrants do to this day. Governments in many countries, including Mexico and Egypt, have, since then, requested the consulting services of a think-tank Hernando set up in Lima, though its research and recommendations clash with the interests of the ruling classes in these countries and their redistribute-the-crumbs way of governing. The London Economist has called ILD the most important think tank in the world. Observe — Hernando himself is too polite, a real caballero, but I am a gruff beat reporter — in this regard, Washington, D.C. think tank ever earned such a distinction.
About the Author
Roger Kaplan, a Washington-based writer, covers the Middle East and Africa (and tennis) for The American Spectator.
Letter to the Editor View all comments (16) | Leave a comment
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JimP| 4.13.11 @ 9:01AM
OK. What's going on this week with Hamilton? It's not his birthday, so why have I seen two pieces on Hamilton already this week and this is the third one? In each piece, Jefferson gets 'bashed' and Hamilton is lauded as the genuine great man who is primarily responisble for America being GREAT. And just to be sure that the tar sticks to TJ, slavery is mentioned. Of course the fact that the North had slavery too is ignored, but I digress, that debate is for another column. Oh those propagandistic, vainglorious Virginia founders and the hagiograhic tomes their minions produced on how great the Virginians were, especially TJ. They've pulled a fast one on us all./s
I'm very suspicious. It isn't necessary to be dismissive of Jefferson in order to give Hamilton his due. So what's really going on? I suspect big government, high tax Repubs are using Hamilton for ulterior reasons. I'll be watching with interest and a jaundiced eye to see what is really afoot.
Caveat emptor!
Hillel| 4.13.11 @ 9:38AM
Jefferson's preference was for the Yoeman farmer who did not have the time for vice as plantation owners did. Their land was hostage to their votes so they would not vote faddishly. He thought that the artisans and mechanics of the city were too beholden to employers to vote independently and too prone to mob action and riot.
Al Adab| 4.13.11 @ 11:23AM
Hernando De Soto has the answer and it is found in his book The Mystery of Capital. It i not foreign aid or international development banks, it is in private property. That is the key and unless the world discovers that (and perhaps America rediscovers it) we will continue to suffer under the central planning delusion.
Renaissance Nerd | 4.13.11 @ 11:35AM
It always irritates me when Hamilton is described as a 'big government' conservative. He was a Federalist, which means a strong central government, yes, but also diffusion of power throughout the political subdivisions of state, county and township. The Anti-Federalists were against a standing army and navy, preferring a weak central government, indeed preferring the Articles of Confederation to the Constitution.
I haven't seen the documentary about Hamilton, and while I'm glad to see his life and work being discussed, the tendency of the documentary and those writing about it seems to read too much present-day definitions and beliefs into his time. It's a common, nearly constant error in trying to understand people of other times. Many don't seem to realize that they were actually doing something completely new at the founding of this Republic--they paid heed to history but were fully aware that they were doing something never done before. With the advantage of experience in our own time it's easy to judge with too much harshness, or too little. George Washington was the father of the nation, and Hamilton was its architect. One does not have to agree with everything Hamilton advocated to recognize the greatness of his contribution. The Hamiltonian/Jeffersonian divide doesn't apply today; would that it did! There are no Jeffersonians except a tiny fringe of the Libertarians and the anti-tax crowd, and the Hamiltonians of the Federalist era would be well to the right of Rush Limbaugh. Many who describe themselves as libertarian (but not Randite) are really Hamiltonians, whether they realize it or not.
Hamilton of course was imperfect, and made many mistakes. This does not make his great deeds any less; indeed, it makes them greater, as he accomplished them despite his flaws. Like many others of that remarkable time, he was a hero, almost in the Greek sense, touched by Heaven. Trying to cram him (or Jefferson, or Washington) into a present day pigeon hole is a waste of time.
Arizona Bob| 4.13.11 @ 1:40PM
No one, as far as I can see, is reading history backwards or trying to pigeonhole anybody or playing Hamilton against Jefferson. What happened in the past is always relevant to the present -- precisely on the condition that we understand the relation between the two. When the author of a movie, for example, suggests the U.S. Treasury is applying a "Hamiltonian" policy, it doesn't mean this is what Hamilton would do. No one knows what Hamilton would do, and anyway his policies were made in the 1790s, not 2008. The point rather is to understand how Hamilton's ideas help us think through a problem.
This applies to all significant thinkers or actors in history. Jefferson -- both as thinker and actor -- was perhaps a thinker of greater breadth and depth than Hamilton. This is a matter for endless historical debate, and a good thing it is because it makes us learn more about these two men and our own history. But it is not controversial to say that Jefferson could be dreamy and sentimental -- he could also be hard nosed and focused -- and this attitude was quite possibly connected to. or influenced by, his personal position as a member of the plantation class. Other members of this class were neither dreamy or sentimental -- history and biography do not follow mechanical rules.
Arizona Bob| 4.13.11 @ 1:40PM
No one, as far as I can see, is reading history backwards or trying to pigeonhole anybody or playing Hamilton against Jefferson. What happened in the past is always relevant to the present -- precisely on the condition that we understand the relation between the two. When the author of a movie, for example, suggests the U.S. Treasury is applying a "Hamiltonian" policy, it doesn't mean this is what Hamilton would do. No one knows what Hamilton would do, and anyway his policies were made in the 1790s, not 2008. The point rather is to understand how Hamilton's ideas help us think through a problem.
This applies to all significant thinkers or actors in history. Jefferson -- both as thinker and actor -- was perhaps a thinker of greater breadth and depth than Hamilton. This is a matter for endless historical debate, and a good thing it is because it makes us learn more about these two men and our own history. But it is not controversial to say that Jefferson could be dreamy and sentimental -- he could also be hard nosed and focused -- and this attitude was quite possibly connected to. or influenced by, his personal position as a member of the plantation class. Other members of this class were neither dreamy or sentimental -- history and biography do not follow mechanical rules.
e track from saq| 4.13.11 @ 6:59PM
What's it all about?This Hamilton send up.Maybe the dummicrats are looking around for a bill to put ugly's picture on.While I'm sure we all know who I'm talking about sadly no one seems to know who Hamilton is.Let us for God's sake work together to keep the devil face off our currency.
Arizona Bob| 4.13.11 @ 7:36PM
H. de Soto's research and writing are uniquely important because they dwell on the kind of simple elegant almost mathematical truth that needs to be rediscovered and reinvented in every age because tyranny is always trying to hide it; to wit, property rights are the key to economic growth and individual improvement.
This was Hamilton's insight as well.
But Hamilton built, or at least lay the foundations for, a system that made the practical, or economic, harnessing of this insight possible. He was able to do this because of the fantastic legal traditions that had evolved in Europe, and especially in England, and the accompanying political philosophies.
In the third world the human desire, instinct almost, for property is no less strong, as H. de Soto has so brilliantly demonstrated. But have they got the institutional foundations (beginning with a legal system) an the philosophical underpinnings to build on this? Against all manners of tyrannical kleptocrats? Petty neighborhood gangsters and provincial warlords?
That is the question. And if the answer is no, we may be wasting our time in a lot of our foreign policy endeavors, trying to bring our kind of freedom to the heathen.
Quartermaster| 4.13.11 @ 8:28PM
Hamilton had two major disciples. Henry Clay, and Abraham Lincoln. Anyone that wants to claim that Hamilton was for a "diffusion of power throughout the political subdivisions of state, county and township," must deal with what his disciples actually pushed. Lincoln, in the end, pushed it so hard it cost the lives over 600,000 among the troops of both sides and about 1.5 million civilians in the south. Lincoln also re-founded the country giving us the corruption we have in DC now.
Hamilton a Libertarian? The idea is risible. The FedGov we have now is Hamiltonian through and through. Corruption and all. I think he would be shocked at what he started, but he is responsible for the mess.
Arizona Bob| 4.14.11 @ 4:43AM
You know how we say in basketball, if ya win, ya talk, if ya lose, ya sit down. Look kid, if you can't read, don't comment. The only mention of libertarian by the author is with reference to Adam Smith, in specific contrast to Hamilton.
JimP| 4.14.11 @ 8:42AM
"... Many who describe themselves as libertarian (but not Randite) are really Hamiltonians, whether they realize it or not."
Apparently, Bob, it is you whom cannot read. Quartermaster was referring to Renaissance Nerd's comment, quoted above. It's common practice to reference not just the author's column but a commenter's statement in the same comment thread.
Arizona Bob| 4.14.11 @ 10:22AM
Got it. I stand corrected. Apologies to Quarter and Jim. Read right -- and read our history!
Dee See| 4.15.11 @ 11:14PM
---Sorry. Not falling for the Hamilton con-job again
after what our research has turned up about his
aims, intrigues and connections.
BTW, Washington, initially taken in by Freemasonry, later posted alarm over the
infiltration of Illuminati, broke ranks and
became a true believing, baptised Calvinist.
A couple of weeks later he 'expired suddenly'.
Need we say more?
spokelement | 4.16.11 @ 7:25AM
The manner of recent government intervention could be considered Hamiltonian in its application, given Alexander's remarkable ability to influence and assert power. Whether he would have actually taken such steps is a far more debatable question. It is even more unlikely that as Secretary of Treasurer he would have ever allowed the problems to progress to the point they did.
weddingdress | 7.5.11 @ 4:35AM
That is the question. And if the answer is no, we may be wasting our time in a lot of our foreign policy endeavors, trying to bring our kind of freedom to the heathen.
Creative Recreation | 8.10.11 @ 10:24PM
is good