merican conservatives quite naturally want to take their bearings from the American founding. This undertaking, however, is not always as easy as we might wish.
In some ways, the conservative’s quest to be guided by the founders is relatively straightforward and problem-free. The founders’ minds were not tainted by the intellectual diseases that have disfigured American politics over the last century. Therefore, it is a simple matter to deploy the wisdom of the founding against the follies of later, erring generations.
The founders, for example, were largely immune to the belief in progress as a historical necessity, and they accordingly did not share the delusions of the later American progressives: unfounded confidence in the continual improvement of the human condition, accompanied by disregard for the constitutional limitations that are necessary to keep tyranny at bay. Much less were the founders susceptible to the radical egalitarianism and moral liberationism of the American left of the 1960s, or to the balkanizing identity politics of today. We find, then, in the founders—in their confidence in moral truth, combined with their realism about human nature—the intellectual materials needed to oppose the errors of twentieth and twenty-first century American leftists.
In other areas, however, seeking guidance from the founders proves to be a trickier business. Conservatives want to keep the activities of the federal government within proper limits, especially as regards its interventions in the national economy. This is a pressing task, because contemporary liberals have almost no interest in such limits, and indeed seem to have an insatiable appetite for government regulation of the economy. Since the founders were decided proponents of limited government, it makes sense for today’s conservatives to look to them for instruction on this question.
But when one examines their thoughts on this matter, problems emerge. The founders were united in believing in limited government, but they did not agree on what that meant. If we could ask them to describe the proper role of the national government in the national economy, we would get different answers from a Federalist and a Jeffersonian Republican—although the answers of neither, to be sure, would lend much support to the aspirations of the contemporary liberal. Accordingly, when we turn to the founders for positive guidance on this question, we seek not so much a set of ready-made answers, but greater wisdom about both the dangers of, and justifications for, active government.
This is the wise lesson of Jay Cost’s The Price of Greatness: Alexander Hamilton, James Madison, and the Creation of American Oligarchy. In this brief and readable study, Cost—a well-known political commentator and contributor to the Weekly Standard, National Review, and RealClearPolitics—illuminates one of the key fault lines in the American founding, and in American politics generally, by examining the complex relationship between two of the greatest founders: Alexander Hamilton, our first secretary of the treasury, and James Madison, the father of the Constitution and, later, fourth president of the United States.
Hamilton and Madison began as intellectual and polemical comrades in the quest to give America a government adequate to the needs of the union. They agreed that the Articles of Confederation did not establish a workable government and that, left unreformed, it would lead the country to ruin. They agreed that the Constitution of 1787—to which both had contributed as members of the Philadelphia Convention—was far superior and ought to be ratified. And they labored together to effect that end by producing between them almost all of The Federalist Papers essays. Thus their remarkably fruitful collaboration helped bring about a new government in practice and produced one of the great works of American political theory.
Hamilton and Madison’s alliance turned into bitter opposition, however, when they set about putting the new government into operation. The point of contention, Cost relates, was Hamilton’s program as secretary of the treasury, about which Madison, as a member of the new Congress, had reservations that grew into outright disapproval.
Hamilton’s first task as President Washington’s secretary of the treasury was to create a provision for servicing the nation’s revolutionary war debt. Madison, along with most of the founders, agreed with Hamilton that paying the debt was both morally and practically right—necessary to do justice to the creditors and to restore the public credit that was essential for the government to borrow at reasonable rates when circumstances required it. Madison, however, wished to see a scheme of “discrimination” between the original holders of the public securities and the subsequent purchasers of them, viewing the latter as speculators who would reap undeserved windfall profits from the government’s new ability to pay its debts. Madison proposed a plan according to which both classes of men would get something but neither would get everything. Hamilton, however, opposed “discrimination” as unworkable and unjust, since the subsequent holders of the debt had purchased it and had therefore acquired a legal right to the full value of the certificates.
Moreover, Hamilton proposed that the federal government assume—or take responsibility for paying—the revolutionary war debts of the state governments as well. Although Madison had supported such a measure earlier in the 1780s, he now had reservations about it, because some states had already paid much of their debt and because there had not yet been a complete accounting of these obligations. Ultimately, Hamilton prevailed on both counts.
In round two, Hamilton succeeded—again, in the face of Madison’s opposition—in establishing the first Bank of the United States. Here their disagreement mingled different approaches to constitutional interpretation with divergent visions of the common good. Hamilton thought the bank was a necessary adjunct to the government’s authority to borrow money, and that the paper currency it would issue would energize the national economy, but he also emphasized that the doctrine of implied powers on which the bank’s justification rested was necessary to the energy of the federal government. For his part, Madison feared that a corporation like the bank might grow into a political power in its own right, distorting the nation’s politics, and therefore held that so grave a power as is involved in creating corporations should not rest on mere implication.
Finally, in his Report on Manufactures, Hamilton contended that the nation’s power and independence required it to take steps to develop its manufacturing economy. Here Hamilton favored a system of “bounties”—or subsidies—paid to budding manufacturers as a more direct and effective tool than protective tariffs. Although Congress did not act on this plan, the proposal itself was sufficient to convince Madison—and Thomas Jefferson—that Hamilton was willing to transcend constitutional limits on federal power in order to reward his favored constituencies with governmental largesse.
As Cost demonstrates, both men thought that fundamental issues were at stake in these policy contests. Hamilton thought his policies were necessary to make America a great and powerful nation, securing its independence and its dignity against threats posed by European superpowers. Madison, however, thought Hamilton’s program and its consequences undermined the republican character of the country by fostering inequalities of wealth and power and by setting off a self-interested scramble for public benefits in which concern for the common good was lost.
Although he seems somewhat more disposed to Madison, and despite the somewhat polemical quality of his subtitle (it goes a bit far to speak of “the creation” of an “American oligarchy”), Cost handles this interesting and important story in a fair and evenhanded manner. He defends Hamilton against the most extreme charges leveled against him by Madison and his Jeffersonian allies: that Hamilton was a monarchist and a purveyor of public corruption. And he defends Madison against charges that he was merely inconsistent or an opportunist, showing that Madison’s critique of Hamilton’s program was rooted in principles that informed Madison’s statesmanship throughout his career.
The clashes between Hamilton and Madison were not the result of mere personal differences, or even different judgments about practical politics. They instead arose from an unavoidable tension in the regime itself. The Constitution was devised, Cost contends, in order to combine diverse goods that do not go together easily: liberalism (or respect for individual natural rights), republicanism (or majoritarian self-rule), and nationalism (the desire to have a strong and independent country). The Price of Greatness illuminates for the reader the trade-offs revealed in these two great founding careers. The policies that make a nation great and powerful—Hamiltonian policies—may undermine the spirit of republicanism by increasing economic and political inequalities, and by stoking the resentments that inevitably accompany competition for government benefits. At the same time, a government that avoids these dangers by its strict adherence to republican simplicity and purity might not be able to make the country strong enough to defend its security and its honor in a world in which, then as now, there are powerful but unfree nations that would like to subordinate us.
Cost reminds us that this is not so much a problem that can be finally solved as a tension that must be prudently managed—with prudence maintaining a balance among the competing goods that the founding tried to harmonize. To succeed over time, such a task requires statesmen with the clarity and commitment to principle of men like Hamilton and Madison. We cannot guarantee the emergence of such statesmen, but the first step in preparing the ground for them is the sympathetic but critical study of those who were present at the nation’s founding. The Price of Greatness is a good place to begin that essential investigation.