December 8, 2011

"The oldest battle in our political history"

Walter Russell Mead, The Age of Hamilton:

...As we gear up for 2012 and beyond, American attention is increasingly returning to the oldest battle in our political history: the battle between the Hamiltonians and Jeffersonians that split George Washington's cabinet down the middle and established our first party system.

That fight was essentially over three things that divide us intensely today: the role of the federal government, the nature of the credit system, and the future of the social hierarchy.  Alexander Hamilton favored a strong federal government at home and abroad, a centralized credit system similar to the British one with a Bank of the United States acting as our central bank, and believed that the best educated and most widely experienced people in the United States constituted a natural aristocracy and should play the leading role in our politics.

Thomas Jefferson disagreed with virtually everything Hamilton believed.  He wanted a weak federal government, detested Hamilton's banking system, and feared that the alliance of a social elite with a powerful government and a strong central bank would turn the US into a European-style aristocratic or monarchical society.

Bipartisan Establishment, meet Mr. Tea Party. The disagreement between these two men continued to reverberate down the years.  John Quincy Adams, Nicholas Biddle, Henry Clay, Daniel Webster and Abraham Lincoln sided with Hamilton up through the Civil War.  Presidents Madison and Monroe followed Jefferson, more or less; so in his own irascible way did Andrew Jackson.  The Southern Confederacy tried to write Hamilton out of the constitution when it modified the Philadelphia document to serve the rebel government....

My off-the-top-of-my-head response is that I think the Information Age is going to trend more Jeffersonian. Industrial Age organizations were characterized by top-down management by "the few," because they needed these to manage the flow of information, which was done mostly by moving pieces of paper around. The Information Age will be characterized by smaller, more informal organizations, and by more opportunities for outsiders to route around elites.

And credit systems will probably not be controlled centrally, just because they have already become too complex and protean to be even understood by any central control. My suggestion is that the only regulation be the requirement that a certain percentage of all financial instruments be held by the people and companies that issue them. That would make them self-regulating.

Posted by John Weidner at December 8, 2011 9:43 AM
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