Reflections on The Federalist Program (Empire of Liberty #1)

Alexander Hamilton's plans for America.

Wikimedia Commons: Alexander Hamilton’s signature

I photographed the Inner Harbor as the sun lowered into the distant horizon. Standing before the Maryland Science Center, I thought about times I would visit the building as a child and adult. It has been a staple of my life, but that can’t be said for every generation. The Maryland Science Center began as one of the centerpieces in Baltimore’s mid-century overhaul of its Inner Harbor. Sitting along an estuary leading into the Chesapeake Bay, this beautiful commercial center was not always a tourist hub. There were idle piers and old warehouses before the commercial establishments we know today arrived.

As the economy changed, the area began to resemble deindustrialization, with abandoned warehouses and idle piers. Thus, a private-public partnership moved forward with a plan to recreate the port into an entertainment district and spend money to create a wave of popular attractions that could improve the city’s tax base.

Developers worked closely with municipal and state governments to centrally plan the new harbor, which included the Maryland Science Center, the Convention Center, Harborplace, and the National Aquarium. High-profile investment emanated from James Rouse of the Rouse Company and Marriott International. There was also funding from the city’s municipal government and urban renewal grants from Housing and Urban Development (HUD). The Inner Harbor benefitted from tax-incremental funding (TIF), which relies on revenue from increased property values, with the downside being that former residents are priced out. The method has its fair share of praise and criticism.

Taken during a stroll along the Inner Harbor

My experience with the harbor has evolved over my lifetime. It began as a place of wonder with all of its kid-friendly attractions. Today, it is a place I explore from the perspective of a curious local citizen reflecting on the place he inhabits. In so many ways, my exploration of this familiar locale reflects the themes of my current choice of reading. In Gordon Wood’s Empire of Liberty, he explores the panoply of forces melding together a recently liberated America in its early governing period. So far, I am at the beginning of the Adams presidency as the international embers of the French Revolution travel across the Atlantic into the United States.

At this point in the book, Alexander Hamilton, the first Secretary of the Treasury, envisions a modern state modeled after the financialization of English society. Hamilton’s plan was implemented despite growing opposition from the first Secretary of State, Thomas Jefferson, and the first Speaker of the House of Representatives, James Madison. Hamilton’s position became the official position of the Federalist Party. In the beginning, Congress had enough faith in Hamilton’s acumen to suspend the Ways and Means Committee because Hamilton was drafting federal spending plans.

At the end of the Revolutionary War, the U.S. was racked with debt at the state and federal levels. Hamilton planned to repurpose that debt through the federal government’s purchase of debt owed by the states. This inevitably angered representatives of Virginia and other states who had already paid off their debts. Prominent voices against the debt plan felt that the people benefitting were financial speculators who bought bonds at reduced prices and could get their losses written off by the federal government. Supporters of the debt plan felt that a strong central government with financial power was essential to national growth and credit creation.

The debt plan was coupled with Hamilton’s urgency for establishing a national bank. The idea was that this bank could spur development and commerce by increasing the federal government’s access to credit. Opponents of the bank plan felt that it institutionalized the ability of a financial class to rise with the aid of an inevitably corrupt bank. Thomas Jefferson and James Madison famously opposed the bank plan, arguing it was unconstitutional. Hamilton rebutted this line of attack using the Necessary and Proper Clause, which ruled that Congress could enact legislation that it, as an institution, felt was essential to the national well-being.

Hamilton’s debt plan succeeded because of a bargain with debt-free states to move the national capital to the designated region between Maryland and Virginia. Although the Constitution was only a few years old, the regional divides were already heating up.

The Federalist program coincided with emphasizing the creation of manufacturing hubs alongside agricultural ones, including protective tariffs. Gordon describes Hamilton’s approach as studying Great Britain’s transformation after the English Civil War:

“More than any American, [Hamilton] saw England’s eigteenth-century experience as an object lesson for the United States, and he deliberately set out to duplicate England’s great acheivements in political economy and public policy.

By the eighteenth century England had emerged from the chaos and civil wars of the seventeenth century, which had killed one king and deposed another, to become the dominant political and commercial power in the world. That this small island on the northern edge of Europe with a third of the population of continental France was able to build the greatest and richest empire since the fall of Rome was the miracle of the age. The eighteenth-century English ‘fiscal-military’ state, in historian John Brewer’s apt term, could mobilize wealth and wage war as no other state in history ever had. Its centralized administration rested on its bureacratic ability to acquire and use knowledge, and it had developed an extraordinary capacity to tax and to borrow from its subjects without impoverishing them.

Hamilton saw that the secret of England’s success was its system of funded debt together with its banking structure and its market in public securities. By attempting to duplicate the English experience, Hamilton was flying in the face of several generations of bitter intellectual opposition to the commercialization of British society and the corruption of British politics.”

Hamilton’s plan is the foundation of the modern American economy, even though the existence of a national bank would remain a fraught issue. What strikes me most is that Hamilton’s dream was not fully realized in his lifetime. Still, after America’s experience with its Civil War, it would rise from the ashes under a similar commercialization and favor the plans of Hamilton’s ghost. Ultimately, the American state would perfect the model of a commercial empire in the 20th century and surpass its former colonizer.

From a modern standpoint, state-sponsored economic intervention favors more left-leaning ideologies and positions. But this was the conservative view at the time, mainly because it was deeply connected to a sense among the Federalists that government should only be run by disinterested gentlemen who are bred to understand the sophisticated art of statecraft. It was a profoundly elitist view. Accusations of Hamilton being a monarchist were also not uncommon, and the Federalists would often talk of monarchical republicanism. Such was the imagination of statesmen of the late 18th century and early 19th century. Indeed, many of the Federalists favored a strong executive.

The Federalist program is deeply connected to the structures that would become a mainstay in the industrial northern states and, eventually, the nation.

Baltimore’s Inner Harbor manifests an economy built on modern networks requiring credit and state intervention. It emanates the power that Alexander Hamilton envisioned for America.