The divide between two of America’s founding statesman, Thomas Jefferson and Alexander Hamilton persists today in the split ideologies of those who believe in governmental economic intervention and those who believe in true laissez-faire capitalism with no or absolute minimal government interference. Thomas DiLorenzo offers a glimpse into this struggle in his book Hamilton's Curse. As the title suggests, DiLorenzo is far from impartial in presenting this debate. DiLorenzo considers himself a Jeffersonian and his economic and political viewpoints are apparent as he argues that Hamiltonian policies have corrupted the American ideal of freedom. But does DiLorenzo’s book offer a fair judgment of American history?
DiLorenzo’s argument is straightforward. First he states that America was founded on a couple of key principals. One, that the governance of America was originally to happen mostly at the state level, with each state being a sovereign body, incorporating even smaller, distributed governments at the local level. The central, or “federal” government was to be a small administrative body to help coordinate interstate issues and foreign relations. The very reason why our central government is referred to as federal is that it is supposed to represent a federation of politically and economically independent states. The second principal on which America rests is the economic ideology of laissez-faire capitalism. The free market, in which people seeking profit compete and innovate for the ultimate good of society.
If the reader disagrees with either of these fundamental premises, he or she will have a hard time accepting the rest of DiLorenzo’s rhetoric on the subject. His arguments are essentially Jeffersonian in nature, and he champions Thomas Jefferson throughout the book as the guardian, lamentably defeated, of America’s dream. He sees Hamilton as the archetypal enemy of that dream, placing the historical blame for the current condition of America on the shoulders of Hamilton and the ideologies he espoused. He paints Hamilton as a greedy, corrupt, power hungry elitist. If that description sounds familiar, DiLorenzo may have a point about modern day America inheriting its policies from Hamilton. However, it is not how he views Hamilton that is cause for skepticism; Hamilton’s centralized notions of administration, his ties to banking, and his desire for an “American King” are all well known. It is DiLorenzo’s unflinching belief in the dream of theoretically perfect capitalism that makes his arguments suspect.
DiLorenzo believes and adamantly argues that given the right conditions, the free market would be an ideal system. He argues that it is government intervention and subsidy that has corrupted an otherwise immaculate system of economic relation. This kind of willful naivety about capitalism brings to mind the old adage that “Communism works in theory, but not in practice.” People say that without blinking an eye, but say the same of capitalism things are much different. It is DiLorenzo’s omission of the many faults and failures of so called pure capitalism that makes his often valid criticisms of Hamiltonian policies seem less like an objective observation and more like a propagandistic tool to further his libertarian agenda.
The problem of many books on a wide variety of issues is that they create a false binary of opinion into which they wish to draw the reader to one particular side. DiLorenzo’s dichotomy exists between pure capitalism and Hamiltonian capitalism. But there is much more to the argument he makes than the two sides he presents. A book like Therborn’s What Does the Ruling Class Do When It Rules? presents a much more comprehensive picture of the various faults and strengths of large scale ideologies and their practice. Books like DiLorenzo’s, who also wrote books on how Abraham Lincoln abolished states rights and How Capitalism Saved America, are almost a sort of distraction for the politically and economically minded reader. By keeping people obsessed with the same two-sided debates on issues that only peripherally touch on the fundamental problems that need to be addressed, the actual arguments that should be taking place are laid aside. One should not be asking which kind of capitalism is best, but first, is capitalism a viable option to secure the future and integrity of the people of the United States and of the world.
DiLorenzo barely touches at all on slavery and the profits Southern farmers derived from their free labor, or the horrible conditions which this “free market” forced human beings to endure. Instead he points the finger at New England corporate fatcats who weren’t taking Southern farmers’ interests into account when making policies. Like many who debate the American Civil War, he takes a side on the States Rights/Slavery binary, claiming that the Civil War was fought to instate the undeniable power of the federal government over the states. He may be right about how the federal government seized the opportunity of the Civil War to strengthen its power, but by omitting the other factors that caused the Civil War he obscures the full picture of that time and forgets that it is his precious profit incentive that led to hundreds of years of slavery for hundreds of thousands, if not millions, of people. He even goes so far as to condemn the government’s interventionist policies when they instituted child labor laws to keep children from working in mines.
The crux of the problem rests here: the free market, with no moral controls, will, as we have clearly seen throughout its entire history, perennially crush generations of human beings in order to achieve the widest profit margins possible for those with wealth. From unfair labor conditions to overseas job shipping, corporations will do anything, at any human cost, if it improves their bottom line, including destroying our very planet and all of its resources. The free market provides no monetary incentive for businesses to be environmentally conscious. Capitalism is the will to profit and nothing besides.
However, if one relies on the government to morally restrict business and govern economics, rather than passing moral fiber from the government to the businesses, it instead corrupts the government with money. Who then is to restrict businesses and force them to practice their trade with morality, humanity, and environmental concern? This is the question that must be answered before we start a crusade to wrest the specter of the free market from the hands of corrupt politicians.
Hamilton’s Curse is a quick and interesting read, but unless you already lean towards DiLorenzo’s Jeffersonian, libertarian ideologies, it does not offer a useful picture of history, politics, or economics. There are thousands of books supporting every possible perspective of America. A reader shouldn’t be afraid to read a book that goes against his or her ideology, but neither should he or she be afraid to critically analyze a book with which they agree. Checking sources is important when reading political, economic, and historical texts, but equally important is for each reader to step back from what he or she is reading and really reflect on the arguments being made and how their author is manipulating his or her audience towards a desired ideological outcome.