Wednesday, June 27, 2007

Hamiltonian Capitalism

A TV special on Alexander Hamilton from PBS's American Experience taught me more about why America is so successful. We all know America has created incredible stability in just 200 years, and regardless of where America stands 200 years from now, if other countries also achieve affluence, it will be through copying America's economic system. In actuality, what people will be doing is copying Hamilton's vision. One of the best quotes from the PBS special was that although Lincoln, Jefferson, and FDR have monuments in D.C., no monument exists for Hamilton. The scholar says that is fine: modern America is Hamilton's monument.

Hamilton fought for a national banking system against Jefferson's agrarian vision, was born in the West Indies to an unmarried mother, received only some books as an inheritance, and worked as an accountant as a teenager and as a lawyer afterwards. Understanding the U.S. as Hamilton's country opens our eyes to exactly why modern America works. One, Hamilton wasn't part of "the club." In fact, without George Washington's interventions on his behalf, he may have never been of any consequence. Because Hamilton had to work for a living, he created a system where anyone--even the bastard immigrant child of a single mother such as himself--could live in stability.

Hamilton, as a teenager, saw slaves being treated very poorly in the West Indies. As a result, the quasi-documentary insinuates that while Jefferson seemed comfortable owning slaves, the lesson Hamilton learned from slavery is that mankind's passions had to be corralled. Thus, one goal of Hamiltonian capitalism is to reduce and control men's passions through a system that includes protection of property; rewards for delayed self-gratification; strict enforcement of contracts; and when all else fails, imprisonment. Such a system, by encouraging materialism and hard work, forces people to think locally and have a vested stake in local rather than non-profitable or international events. In fact, some might say capitalism works precisely because it causes an investment in local matters. The average person's day is spent on bosses to placate, work to be done, debt to pay off, television to watch, kids to feed, and bills to be paid. There is no time, or it is not profitable, to think of solving larger issues that one cannot affect. The upside of capitalism's gimlet eye is that it forces us to live in the here and now; the downside is that it works too well--apparently, only 10 to 21% of Americans own passports. I am a huge fan of Jefferson--no one can match his passionate defense of the individual--but seeing this PBS special made me think more about Jefferson's vision versus Hamilton's vision for America, with the conclusion being that Hamilton's vision created modern-day America, while Jefferson's vision would have created an economy similar to modern-day China.

An interesting link:

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