By David P Shirk
Of all the founding fathers, Hamilton is the one I have least respect for. Taking all of the worst policies of all the other founders, and then compounding them in an effort to re-establish some type of Monarchy in the newly established states, he worked endless hours trying to accomplish what we have today. It is truly sad that of all the founders, we have sought (and have almost completely succeeded) to follow, it was him.
I cannot fathom how a man like Hamilton, one who favored the British system so much for its perceived sound money, war-making capability, and Aristocratic sensibilities, came to be part of our revolution. Taken under George Washington’s wing at a young age, he grew to become quite a scholar and warrior. Unlike Washington though, he sought for a highly centralized state that left little power to the states themselves. Washington was a bit of a pessimist as far as human nature, but not so much that he would want the kind of system Hamilton envisioned.
Such was Hamilton’s attitude that he would make course remarks about Madison’s and Jefferson’s views and ideals with no regards to what truth was behind them. He believed Jefferson’s faith in people to be misplaced and naïve. He believed Madison’s dim view on the countries development was not nearly dim enough, and made it plain that he was going to try to change it. He believed that in the form of Government Jefferson advocated, that the people would seek to become to politically involved, and elect officials who would make ignorant decisions that would further weaken the young country. He believed that the government Madison advocated was not nearly powerful enough, and lacked the backbone needed to keep the ‘citizenry’ in check. It was only through his despicable actions that he turned out to be right.
Washington was president at the time, and had a strict policy for sticking to the constitution as much as possible, and was highly cautious when making any changes. Hamilton saw how little Madison and Jefferson were able to influence politics, and that his position of Secretary of the Treasury would not be enough to get his way. He saw how in Britain that by forming ties between Government and influential companies and bankers, that the states power could be greatly increased without a perceived coercion by the people. From taxes to military power, Hamilton saw Britain as the perfect model.
So in the 1790’s, he petitioned Washington to allow him to establish a Central Bank. Now Washington was not immediately moved by his request, and sought advice from Jefferson and Madison, who both strongly argued against the idea. He then gave Hamilton the opportunity to defend his position, and asked Hamilton to submit his rebuttal. Hamilton knew that the new country was not currently able to pay off its war debt, and played on Washington’s fears of being militarily too weak to handle a foreign attack from Britain and France, or ever becoming economically stable. He knew that Washington’s grasp on economics was his weakest point, and used it to get Washington to agree with his proposal. He used the constitutional clause ‘To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers’ (Section 8, Article 1), to overcome Washington’s last argument on a constitutional basis.
Thus was Hamilton able to establish our first central bank – The First Bank of the United States. Though its charter would not be renewed immediately after it later expired, it created a powerful force that set a precedent that would later become the blueprint for the central bank we have today – The Federal Reserve. This first central bank was the beginning of the marriage between politics and our nation’s monetary system – something that the modern day one refuses to admit. Yet through this early example we are quickly able to see beyond this disaster, and better understand its full power.
Upon its inception, this new entity gave Hamilton more power then anyone, even George Washington. With the new lines of credit extended to the country, the bigger companies who were able to repay loans more quickly then the private citizens got the lion’s share of the money lent. Their support to Hamilton’s policies enabled a whole slew of lobbying groups and special interest, much like we see today. The larger companies who stood to benefit from Hamilton’s whims would rally public support to whatever policy they wanted, and a good majority of the people would elect their officials accordingly.
To many other founders, this was nothing short of tyranny. They watched with pained hearts as the people they sought to empower made such choices. This was especially painful to Jefferson. We need to remember that in the early 1780’s, a split was made between ones personal life, and political one. When we hear references to Jefferson’s want of a democracy, it was not meant one of government, but rather for every individual to have a say to their own lives – remember that Jefferson wanted a Republic small enough to only offer protection of liberties, not to force public action through political policies. This stark contrast to what he wanted and what he ended up with was nothing short of a knife in the back. He felt as though all he had sought to give the people was taken. In the critical phase of our nation’s development, it was the people who gave themselves to the political mess due to lack of knowledge and understanding of political power plays that would continue to drive the knife deeper.
Politics began to grow so much in power that it actually became popular – something even Madison feared from the beginning. Even though Madison and Jefferson had different views on the role of government, both were very much upset of this whole turn of events.
Yet Hamilton was not even close to finished. He wanted an alliance between the US and Britain, and sought to make France the new public enemy – the very same country that aided them in their fight for independence against Britain. To do this, he knew that he must make America seem like a match for Britain in every way – which included a military that was capable of waging war anywhere in the known world. So it came about that during Shays rebellion, and a number of other civil uprisings, he continued to play upon Washington’s ignorance in such matters in order to erect a stronger military. Having served with Washington before in wartime, he knew exactly what buttons to push. He consistently pushed for a standing army and other assorted nonsense, and in many cases, got his way.
Yet in spite of all his seeming success, there was enough opposition at the time to put a leash on him. His arrogance and conduct led him to be alienated (even if only at a small level) to those whose help he would have required to finish the job. From Washington to Jefferson, his mouth and temperament often put them off of an idea that they might otherwise have given more thought. We are emulating the same behaviour shown by the people of that time – seeking government involvement where it should not be – involvement that helps us in no way, but rather the select groups who stand to benefit. So the powers of the political world continue to grow as they did then. Yet the modern day Hamiltons have learned and learned well. Many of the power brokers have learned not to put off their potential allies with their harsh disagreements, but have learned to wine and dine them into submission, playing the proverbial pipers flute.
One point here, is that no central bank will ever admit to being politically involved, yet by its very nature, is bound to the government in every way. Another point is that what we are seeing today is hardly new, yet because it has been widely forgotten or ignored, our history in such a matter can hardly provide a guide which we can learn from. This needs to be remedied, and quickly. We are following the blueprint made by a man over 300 years ago, and if we remain true to it, have only one thing to look forward to – a complete loss of freedom of more then just our physical beings, but our mental ones as well. As each generation wears on, it becomes more and more lost to the ideals of free thought as it becomes acceptable to just go with the ‘norm’. When people seek to keep their personal freedoms, the only thing the government can do to let it happen is to stay out of the way. When people seek government as an answer to their problems, they quickly become its slave. We have to break this mental slavery before it completely destroys every last vestige of freedom we have left. This starts from learning where it started, what makes it work, and how it continued for so long with no one stopping it. This will be continued in my next article.
I will continue this in my next article due to attention span issues, but a lot more happens later that made matters even worse. I will not argue that Hamilton did have a point when it came to the states neglecting to pay their debts, banks being slack in their policies, and people being ignorant of the political systems, but I could never agree to his solutions. My next article must be read to understand what other options were available, and what we could learn from them today.