NEW BOOK: RADICAL HAMILTON

Christian Parenti: I wrote the book by mistake, because I stumbled upon Hamilton's often name-checked but rarely discussed magnum opus, his 1791 Report on the Subject of Manufactures. At first the plan was to just republish the Report with an introduction. But that grew into this book.

As I read up on the Report it became clear that there were major omissions and misunderstandings about Hamilton's political economy and its role in the course of U.S. economic development. Cast by most historians as the patron saint of free markets and financiers, Hamilton actually begins the Report with an attack on Adam Smith and laissez-faire economics. He then goes on to present a sweeping program of transformation-oriented economic planning. This is totally at odds with the mainstream story of American capitalism and Hamilton's place within it. Most books on Hamilton do not address Hamilton's vision of a planned economy.

Michael Busch: In the book, you argue that the Revolutionary War was formative for Hamilton, though not in the ways we have been led to understand. What was Hamilton's experience of the war, and how did it shape his political economic thinking?

Christian Parenti: Hamilton begins as a frontline officer, but after about a year and a half in combat he accepts a position on George Washington's staff. From that vantage point, Hamilton gets a broad overview of the conflict as a logistical, economic, and political process. He quickly sees how totally dysfunctional things are and that the central problem is a disunited and weak government.

The thirteen colonies have come together under the Articles of Confederation, a loose security pact, and Congress, the only national institution along with the Continental Army, does not even have the power to tax. It must request money from the states. The states do not always pay up. When they do, they sometimes try to direct resources exclusively to their own military units. For example, Pennsylvania sends cloth to Washington but asks him to distribute it only to the Pennsylvania line. In that example the shipment of cloth had already been looted by desperate citizens before it even reached Washington's command. In every aspect of the struggle there are major coordination problems and a dire lack of resources.

Amidst this, Hamilton gets a frontline education on the importance of national credit, economic coordination, and manufacturing capacity. And, he begins to sketch the outline of what Charles Tilly and later social scientists would call a "fiscal military state"—a government that can create economic conditions through borrowing, taxing, investing, and guiding the larger national economy toward growth, which, in turn, pays for the administrative and military capacities the state needs to defend its sovereignty internationally and against internal threats.

The Republics survival was not guaranteed by military victory, nor by experiments in democratic government alone. It required a profound economic transformation that took decades to achieve. And that economic transformation did not just occur naturally—it had to be produced by a sophisticated, innovative, and sweeping program of government action.

MB: It strikes me that the Hamiltonian theory of political economy in some ways anticipates Karl Polanyi's idea that the private sector is fundamentally dependent on government for its continued existence. In this light, your book understands the Constitution as a kind of toolkit for state-driven economy building. How does the Constitution do this—and in particular, how does it empower government to take economic action on behalf of the people?

CP: Most literature on the Constitution looks at how our government works: checks and balances, the three branches of government. I looked instead at what this government does. And in Article 1, Section 8, the Constitution reads as an outline for the developmentalist, or dirigiste, state.

There is a lot of seemingly prosaic and wonky stuff in Article 1, Section 8, so it is usually overlooked. But add it all up and you see a rudimentary but powerful policy toolbox for driving economic growth and transformation: taxing and spending, coining money, setting weights and measures, creating a post office and under its authority building transportation infrastructure, controlling bankruptcies, controlling intellectual property rights, regulating foreign trade and commerce between the states, controlling development of federal lands, building a navy and military, supporting scientific research, and serving "the General Welfare."

The Postal Clause empowers Congress to establish post offices and, crucially "post roads." Benjamin Franklin wanted an explicit mention of canals but was defeated. Yet that little word, "roads," meant that during the early nineteenth century the post office acted a huge public works agency—huge by the standards of that day. By 1830 it had built 115,000 miles of post roads, which is to say most of the country's major roads. And it cleared and made navigable all the major rivers. The post office plays an important role even into the twentieth century.

To read the complete article, see:
What We Still Get Wrong About Alexander Hamilton (https://bostonreview.net/class-inequality-politics/christian-parenti-michael-busch-what-we-still-get-wrong-about-alexander)

For more information, or to order, see:
Radical Hamilton Economic Lessons from a Misunderstood Founder (https://www.versobooks.com/books/3186-radical-hamilton)

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