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Alexander Hamilton: Centralist and Nationalist | Mises Wire

Posted by M. C. on September 22, 2020

Similarly, Hamilton’s twisting of the General Welfare Clause has been the excuse for much of the federal activity we see today. His version of it has been continuously expanded, and since the 1930s it has been a blank slate for the federal government to tax and spend on anything it wants. It’s cited so much that many people today actually believe that the General Welfare Clause permits government action “so long as it provides for the general welfare.”

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The September 11, 2001, terror attacks shocked the world, leaving ramifications still felt nineteen years later. Few are familiar with the Republic’s first 9/11 tragedy, September 11, 1789, the day Alexander Hamilton was appointed secretary of the Treasury.

Hamilton is glorified as a hero in popular culture, even the subject of a hit Broadway musical bearing his name. He’s the darling of both mainstream progressives and conservatives—usually a telltale sign that someone is one of the worst of the worst. Part of the adoration for Hamilton comes from his rags-to-riches story. Born fatherless in the Caribbean and soon orphaned, it can’t be denied that getting an education in New York, serving as General Washington’s chief aide, and becoming a leading political figure is an impressive turn of events. Progressives love pointing to Hamilton for their “nation of immigrants” narrative, which doesn’t make sense since Hamilton was born in the British Empire. Hamilton, the übernationalist, is also cited by the neocons as their missing link from the founding to their “one nation” and “America as a propositional nation” mythologies. Getting beyond the romanticization, Hamilton’s agenda set the table to give the federal government the tools to erode liberty over the next 230 years.

Hamilton has, perhaps, done more damage to the United States than any other American figure, even Woodrow Wilson and Abraham Lincoln, two more beloved icons of the mainstream. Hamilton was an opportunist, liar, and duplicitous. His vision paved the way to create a nearly unlimited central authority with no checks on its power, contrary to the principles of limited and self-government that many believed they had put in place for the new republic in 1788.

The Bait and Switch

Hamilton knew how to play the crowd. When it was time to ratify the Constitution, the republican Antifederalists feared a strong, central authority. He assured them only the powers expressly delegated to the federal government would be the ones it would have. The second the Constitution was in effect, Hamilton flipped the script.

One such example is in Federalist essay no. 21, Hamilton said that tariffs were better for the economy than direct taxes. Just three years later, he changed his tune and advocated for a laundry list of direct taxes, which played a part in leading to insurrections such as the Whiskey Rebellion.

In Federalist 33, Hamilton said that the Necessary and Proper Clause was harmless and wouldn’t confer any powers to the federal government not expressly delegated to it. He once again flipped the script in office, citing the exact same clause to take federal action not delegated, such as establishing the First National Bank.

When it came to the General Welfare Clause, Richard Henry Lee was concerned that it would be used for “every possible object of human legislation.” Hamilton retorted that Lee’s fears were “absurd.” In office, Hamilton again pulled the bait and switch, relying on this clause as an excuse to do anything and everything, saying the clause allowed for “a vast variety of particulars neither of specification nor definition.”

Hamilton also claimed the Supreme Court would be the weakest part of the government, unable to do anything against the other two branches. Later on, he helped organize the judiciary to become superior to both the Congress and the states.

Hamilton’s Contributions: Taxes, Central Banking, and Cronyism

As first secretary of the Treasury, Hamilton had President Washington’s ear, using this influence to set his nationalist agenda. His list of “accomplishments”—or should I say “abominations”—includes: centralizing power, high taxes, and crony capitalism, just to name a few.

Hamilton’s pet project was establishing the First National Bank in 1791, a central banking system that was a precursor to the Federal Reserve the US now has, which is responsible for so much economic instability. The federal government didn’t have the money for the bank; Hamilton suggested the bank just borrow from itself. He even went as far as to say the public debt “was a public blessing.”

He had proposed the idea of a central bank in 1787, but it was immediately shot down in Philadelphia. With the idea being this unpopular, it was quite a surprise to many of that generation that one was established just a few years later. James Madison saw no constitutional authority for it, Attorney General Edmund Randolph opposed it, and Thomas Jefferson said the Necessary and Proper clause didn’t permit it. Hamilton’s response was that “necessary” meant “no more than needful, requisite, useful, and conducive to.”

Hamilton also got his way when it came to war debts. The question of how states would pay these came up, Hamilton proposed an assumption scheme where the federal government would take on all the states’ debts. This drew red flags for two reasons. First, taking on these debts would expand the power and scope of what was supposed to be a very limited federal government. Second, Southern states had paid off most of their debt—Virginia had altogether. New England states still had most of their debt unpaid. This policy would have the Southern states foot the bill for the Northern states through increased taxes. Madison and Jefferson opposed this unfair plan at first but eventually conceded in the Compromise of 1790, which put the US capitol in the South in exchange for Hamiltion’s assumption scheme.

Hamilton knew that high taxes would be essential for a central government to do all the meddling he wanted. His list of taxes included the “whiskey tax” which unduly burdened farmers in the west who struggled transporting cumbersome grain over the Appalachian mountains. His crony plan gave unfair tax breaks to large distillers in the east. Those on the western frontier refused to pay. Many of them were veterans of the Revolution who thought the tax went against the very principles they had just fought for. Hamilton kept prodding Washington, who wanted to be a moderate on the issue, to use force to crush the insurrection. Eventually Hamilton got his way and in 1794 thousands of federal troops were sent in to squash the rebellion and show off the might of the federal government.

Hamilton’s Legacy

Hamilton turned the Constitution on its head in office to get away with anything he wanted. This set the precedent for legal scholars and judges alike to read anything into the Constitution that served their political agenda.

Hamilton’s ally John Marshall became the fourth chief justice of the Supreme Court and used Hamilton’s influence to forever change our constitutional order when the ink on the document was barely dry. Marshall’s decision in Marbury v. Madison gave the Supreme Court power of judicial review, allowing it to interpret the Constitution however it wants. He also ruled in McCulloch v. Maryland that federal law was above state law—a complete abomination to the federal system the founders had set in place. These decisions ensured that Hamiltion got his way—a centralized system with an authority that has no checks on it.

Hamilton’s bait and switch on the Necessary and Proper Clause has been used to give the federal government complete control over currency. It has also been used with the Commerce Clause to allow the federal government to regulate anything it wants. This started to take root with New Deal legislation, a prime example being Wickard v. Filburn, in which it was held that the federal government can regulate commerce even when purely intrastate.

Similarly, Hamilton’s twisting of the General Welfare Clause has been the excuse for much of the federal activity we see today. His version of it has been continuously expanded, and since the 1930s it has been a blank slate for the federal government to tax and spend on anything it wants. It’s cited so much that many people today actually believe that the General Welfare Clause permits government action “so long as it provides for the general welfare.”

While Hamilton is glorified by power hungry nationalists, remember that his appointment to the federal government was America’s first 9/11 tragedy. If you like high taxes, crony capitalism, central banking, the states relegated to mere corporations, a central authority that can regulate everything you do, and a judiciary that can do anything it wants, thank Alexander Hamilton.

Author:

Daren A. Wiseley

Daren Wiseley has a J.D. from Indiana University. More of his work can be found at choosewiseley.org.

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The Constitution IS the Crisis | Antonius Aquinas

Posted by M. C. on February 12, 2020

Once read, any notion of the “founding fathers” as disinterested statesmen who sublimated their own interests and that of their constituents to that of their country will be disavowed.  Moreover, The New Republic:1784-1791 is the most important in the series since the grave crises that the nation now faces can be traced to those fateful days in Philadelphia when a powerful central state was created.

I vouch for the first 4 volumes. The best history you never learned in school.

https://antoniusaquinas.com/2020/02/10/the-constitution-is-the-crisis/

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A Review of Murray N. Rothbard’s Conceived in Liberty, Vol. 5The posthumous release of Murray Rothbard’s fifth volume of his early American history series, Conceived in Liberty, is a cause of celebration not only for those interested in the country’s constitutional period, but also for the present day as the nation is faced with acute social, economic, and political crises.  The fifth volume, The New Republic: 1784-1791, stands with Boston T. Party’s 1997 release, Hologram of Liberty, as a grand rebuttal of the cherished notion held by most contemporary scholars, pundits on the Right, and, surprisingly, many libertarians who believe that the US Constitution is some great bulwark in defense of individual liberty and a promoter of economic success.ConceivedInLiberty4in1 Volumes 1-4

Rothbard’s narrative highlights the crucial years after the American Revolution focusing on the events and personalities that led to the calling for, drafting, and eventual promulgation of the Constitution in 1789.  Not only does he describe the key factors that led to the creation of the American nation-state, but he gives an insightful account of the machinations which took place in Philadelphia and a trenchant analysis of the document itself which has become, in the eyes of most conservatives, on a par with Holy Writ.

What Might Have Been

While Rothbard writes in a lively and engaging manner, the eventual outcome and triumph of the nationalist forces leaves the reader with a certain sadness.  Despite the fears expressed by the Antifederalists that the new government was too powerful and would lead to tyranny, through coercion, threats, lies, bribery, and arm twisting by the politically astute Federalists, the Constitution came into being.  Yet, what if it had been the other way around and the forces against it had prevailed?

It is safe to assume that America would have been a far more prosperous and less war-like place.  The common held notion that the Constitution was needed to keep peace among the contending states is countered by Rothbard, who points out a number of instances where states settled their differences, most notably Maryland and Virginia as they came to an agreement on the navigation of the Chesapeake Bay.  [129-30]

Without a powerful central state to extract resources and manpower, overseas intervention by the country would have been difficult to undertake.  Thus, the US’s disastrous participation in the two world wars would have been avoided.  Furthermore, it would have been extremely unlikely for a Confederation Congress to impose an income tax as the federal government successfully did through a constitutional amendment in 1913.

Nor would the horrific misnamed “Civil War” ever take place with its immense loss of life and the destruction of the once flourishing Southern civilization.  The triumph of the Federal government ended forever “states rights” in the US and, no doubt, inspired centralizing tendencies throughout the world, most notably in Germany which became unified under Prussian domination.

In a failed attempt in 1786 to enact an impost tax under the Confederation, Abraham Yates, a New York lawyer and prominent Antifederalist, spoke of decentralization as the key to liberty as Rothbard aptly summarizes:

Yates also warned that true republicanism can only be preserved in small states, and

keenly pointed out that in the successful Republics of Switzerland and the

Netherlands the local provinces retained full control over their finances.  A taxing

power in Congress would demolish state sovereignty and reduce the states, where

the people could keep watch on their representatives, to mere adjuncts of

congressional power, and liberty would be gone.  [64]

Antifederalists, such as Yates, had a far greater understanding of how liberty and individual rights would be protected than their statist opponents such as Alexander Hamilton and James Madison.  The Antifederalists looked to Europe as a model, which, for most of its history, was made up of decentralized political configurations.  The Federalists, on the other hand, got much of their inspiration from the Roman Republic and later Empire.  There is little question that an America, with the political attributes of a multi-state Europe, would be far less menacing to both its own inhabitants and to the rest of the world than what it has become under the current Federal Leviathan if the Constitution never passed.

Speculation aside, historical reality meant that America would be fundamentally different than it would have been had the Articles of Confederation survived, as Rothbard points out:

The enactment of the Constitution in 1788 drastically changed the course of

American history from its natural decentralized and libertarian direction to an

omnipresent leviathan that fulfilled all of the Antifederalists’ fears.  [312]

Limited Government Myth

One of the great myths surrounding the American Constitution – which continues within conservative circles to this very day – is that the document limits government power.  After reading Rothbard, such a notion can only be considered a fairy tale!

The supposed “defects” of the Articles of Confederation were adroitly used by the wily nationalists as a cover to hide their real motives.  Simply put – the Articles had to be scrapped and a new national government, far more powerful than what had existed under the Articles, had to be created as Rothbard asserts: “The nationalists who went into the convention agreed on certain broad objectives, crucial for a new government, all designed to remodel the United States into a country with the British political structure.”  [145]

In passing the Constitution, the nationalist forces gained almost all they had set out to accomplish – a powerful central state and with it a strong chief executive office, and the destruction of the states as sovereign entities.  The supposed “checks and balances,” so much beloved by Constitution enthusiasts, has proven worthless in checking the central state’s largesse.  Checks and balances exist within the central government and is not offset by any prevailing power, be it the states or citizenry.

There was no reform of the system as it stood, but a new state was erected on the decentralized foundation of the Confederation.  Why the idea of the founding fathers as some limited government proponents is a mystery.

The Chief Executive Read the rest of this entry »

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