Arguing about THE HAMILTON SCHEME

(for nerds only--with an expanded endnote to the book)

Talking Hamilton—not arguing—with Lawrence O’Donnell.

I’ve been expecting to hear some pushback from historians and others against aspects of The Hamilton Scheme. While the book is a ripsnorting drama full of page-turning action, with characters who fairly leap off the page!—Good Lord, go buy it!—it rests on a fairly argumentative reading of the origins of the United State, dissenting from placing slavery at the center of the story, as the 1619 Project does, and from various forms of rah-rah opposition to the 1619 Project, some of which place anti-slavery at the center of the story.

In my book, the force behind the American founding is a drive for Hamiltonian consolidations of wealth and power, in opposition to a working-class drive for democracy, making the founders’ Constitution itself essentially Hamiltonian. It’s all objectively true (meaning I’ve come to think it’s a fresh and useful way of looking at the founding and provide detailed endnotes showing why). But it goes against the grain, not just of the usual pop biographies but also of some mainstream U.S. history scholarship.

So far, though—along with some good ones—I’ve gotten the kind of vaguely positive reviews I can’t stand because they totally misread the book or connect it to some preexisting notion of the reviewer’s. Libertarians both at Reason and at the Mises Center, whose ideas about many things no doubt diverge, are notable for having done this, the latter more egregiously than the former. The Mises Center reviewer ropes me into the banal view that the country has historically been divided between Hamiltonian and Jeffersonian modes, a binary first identified, according to the reviewer, by Thomas DiLorenzo (the founder, by a wild coincidence, of the Mises Center), though it's really one of the crustiest cliches in the field.

I explicitly contradict that cliche in my introduction.

And I only wrote the introduction to release book reviewers from the burden of having to read a whole book.

Lesson learned.

The Reason reviewer too pretty much likes the book, with a caveat that I misconstrue certain things because I harbor a hostility to “market outcomes.” If there’s one thing he knows for sure—and there is—it’s that market outcomes, whatever that means, are the greatest thing since unsliced bread.

Libertarians hate Hamilton, so they’ve always paid attention to me, because they think I hate him too, but they’re not capable of getting me. Like the most doctrinaire Communists, they seem to think books exist for the purpose of being evaluated according to how well they advance or obstruct a cause. Some mainstream historians both pay attention to me and get me—without them, I never would have gotten anywhere—but many of the type whose work The Hamilton Scheme pushes against tend to ignore me, partly, I’d guess, because I’m a pop historian: however hard I may knock them down, or fail to, the call is not coming from inside the house.

Also many of them simply rule out wholesale the idea that a class war had any significant impact on bringing about the country’s existence.

With many of my books, therefore, I’ve sometimes been left to conduct both sides of the arguments myself, in endnotes. This time out, my thinking has been refined, at the very least, and sometimes altered, by having to take into account and position my story in relation to arguments by scholars as varied as Robin Einhorn, David Head, Roger S. Brown, Kenneth Owen, Robert E. Wright, and Peter Linebaugh and Marcus Rediker. There are others too. If you go to my expanded endnotes and search just those last names, you’ll see that my struggle, as Karl Ove Knausgård might put it, was so great that I couldn’t fit it into the space I had in the book.

But there’s an important argument I failed to engage with, failed to take account of. I realized I’d made this oversight thanks to an actual argument, which was happening on Twitter, among professional historians disputing some key issues that also drive the plot of The Hamilton Scheme. One of those contenders was Jack Rakove, the emeritus Stanford professor of history, American studies, and political science, and I was bouncing off that Twitter thread of contention with some comments of my own when Rakove took note of one of my comments and, just at the same moment I was realizing it, reminded me that in his book The Beginnings of National Politics: An Interpretive History of the Continental Congress (1979), he’d taken a position in opposition to that of a scholar I rely on heavily in my book: E.J. Ferguson, author of The Power of the Purse (1961), which is still the only really important monograph on financing the War of Independence.

So the rest of this post will add up more or less to an expanded endnote on the dispute between two scholars, Rakove and Ferguson, over the aims of Robert Morris, whom I see as Hamilton’s mentor, when Morris was trying to get the first federal tax through the confederation Congress in 1782 and ‘83; and on how that dispute effects my thinking about the way I present the drama in The Hamilton Scheme.

If you haven’t read my book—and if you haven’t read my book, what are you even doing with your life at this point?—the following won’t necessarily make a ton of sense. But at least the dispute between the two scholars is quite explicit. Not only did Rakove’s book dissent from Ferguson’s; Ferguson gave Rakove’s book a highly critical review in The William and Mary Quarterly, a fact I didn’t know until Rakove mentioned it.

This is the stuff some of us find fun.

* * * *

As those who have read The Hamilton Scheme may remember, when Alexander Hamilton came to the confederation Congress in late 1782 as a New York delegate to that body, and began working there in support of his former boss and mentor Robert Morris, the flamboyantly corrupt executive appointed by the Congress to run war finance, and without whom we couldn’t have had the War of Independence, the financier’s team was working with growing desperation on getting the Congress to pass just one tax: a 5% countrywide levy on imports, known to many at the time as “the federal impost” or just “the impost,” with revenues dedicated to paying regular interest to holders of the Congress’s war bonds.

I won’t review here what made that issue so controversial regarding what the United States was or wasn’t going to be, or the drama involved in Rhode Island’s and Virginia’s refusing to go along, or the ongoing failure of the Congress to pass anything but a watered-down version, etc. What’s important historiographically for the historical understandings behind the drama that unfolds in my book is that with Ferguson, Roger H. Brown, and others—and I think with Hamilton himself!—I see the Morris crew’s effort to get that tax passed in 1783 as a big move in an even larger effort to convert the Continental Congress, step by step and willy-nilly, into a national-style entity.

To many of us, the Congress, as explicitly created, wasn’t a national government. It was a delegated meeting of states, and in that sense literally a congress, ultimately to be confederated for war and other shared interests. In the reading that has substantially influenced mine, a nationalizing effort carried out by some in the governing class, inspired by a desire to forge tight connections between a small, interstate finance elite and a pervasive, top-down government, went against what many others in that class saw as the confederation’s founding principles. (That doesn’t, to me, make the confederation progressive; to some of the early progressive historians, though, it did.)

The proposed federal tax, the impost, was thus “a wedge,” as Ferguson puts it, for further federal taxes and for overcoming state-oriented approaches to finance that had been undermining both the war effort and the pecuniary hopes of the war financiers. The big idea was to gain the Congress lawmaking power over public finance, and begin acting for the first time directly on citizens throughout the states, just as Hamilton had proposed in his famous 1780 letter to James Duane—ultimately to advance further legislation to encourage big national projects.

It didn’t work.

Hence, in this reading, the Constitutional Convention. It threw out the confederation and replaced it with a national government. As Hamilton put it, “impost begat convention”: the confederation government’s failure to pass federal taxation energized the nationalists to build a new form of government on a legal connection between the finance elite and national lawmaking.

Rakove, in The Beginnings of National Politics, dissents from the entire view I’ve just crudely summarized, which is inspired largely by Ferguson, but also by Terry Bouton, whose work first introduced me to Ferguson’s, as well as by aspects of Brown’s work, and also very much by my own reading of the primary record. Rakove is by no means alone in aspects of his dissent. Einhorn—in my endnotes, I both cite and struggle against parts of her great work American Taxation, American Slavery (2006)—denies that the impost was a first step in bringing about a larger program. But where she casts the “wedge” idea as a Rhode Island canard, brought up in the Congress only to aid resistance to a single federal tax, Rakove allows that further federal taxes would have followed the impost; what he denies is that they would have fundamentally transformed the existing political relationships. Einhorn is also aligned with Rakove in framing the Congress as already operating as a national government.

Here may lie the fundamental difference between Rakove and Ferguson, which makes the progressive historian Ferguson, in his review of The Beginnings, condemn Rakove as a consensus historian. Many overtones of their disagreement may be seen as emerging from Rakove’s insistence, p. 304 and elsewhere, that Morris wasn’t in fact trying to alter the agreed-upon confederation system but was simply trying to get it to work, to fulfill its original intention, via passage of a crucial and limited measure, even though that measure would probably have led to others like it, which also, in this reading, were necessary to getting the existing system to work.

This idea—that an underlying sense of nationhood, represented in a body with sovereign powers, was inherent even in the confederation period, and so required no nationalists to bring nationhood about—does seem to me to arise from “advanced-consensus-school” thought (it’s also aligned, spiritually anyway, with the constitutionalism of Albert Gallatin, as I present it in my book). The formulation has a number of interesting ramifications and implications, especially for our boy Hamilton, which I’ll only briefly allude to here by noting that in Rakove’s telling (also see his book Revolutionaries: A New History of the Invention of America), Hamilton gets very far out in front of Morris and everybody else in explicitly pushing to get the Congress new powers, since in Rakove’s view the Congress already had the sovereign powers it needed and, in his view, Morris and others thought so too. Hamilton is often cast by the consensus crowd as a sui generis outlier, breaking up the consensus by being too intense, whereas Morris, in Rakove's 1979 reading, had everything rightly figured out.

Rakove’s view of the legitimacy of the taxing power does track with Madison’s thinking at the time (though I see Madison’s thinking as more realpolitik, tactical, and slippery than Rakove ever will), and it also leads him to frame the more extreme aspects of the Newburgh Crisis, whose historiography I’ve also had to tussle with in my endnotes, as almost solely due to efforts carried out by Hamilton, largely on his own. (That’s a point of view Rakove has set out on Twitter, where think he goes somewhat farther than he does in Revolutionaries.) With me, Richard Kohn, Ferguson, and others, Rakove reads Hamilton’s letter to Washington, reviving their relationship, as an effort to “steal a march” and draw Washington into the politicians’ hope of using the military to pressure the Congress to pass the tax. As I discuss in my endnotes, David Head, author of a recent monograph on the Newburgh Crisis, reads that letter very differently, but either way, making Hamilton a loose cannon, as Rakove’s version tends to do, would get Robert Morris and Gouverneur Morris largely off the Newburgh hook, in keeping with a reading in which they're operating well within a proper and supportive understanding of the confederation’s basis. I don’t think that reading accounts for some of their actions in the crisis, as my telling of those events in my book probably makes clear.

It’s true, though, that Hamilton could get way out in front. In the 1780 Duane letter, mentioned above, he was already more or less demanding, futilely, that the Congress take on new powers. That’s not of course the same thing as replacing the confederation; still, I don’t think anyone believes Hamilton harbored a legal philosophy in which the Congress already had those powers, so I see him as demanding a fundamental change, as Rakove, 288, also makes clear. I don’t think Morris, either, had any basis for believing the powers already existed, or cared whether they did or not, contra Rakove—just that Morris wasn’t as blunt as Hamilton.

Then, in the fall of 1783, totally disgusted, Hamilton wrote a resolution to call a convention for starting over, and while at that point there was no reason even to try getting it on the record, so he didn’t, and soon left the Congress, he clearly had the idea already in mind. In 1786, after the Annapolis convention, when Hamilton drafted a call to the states for the convention in Philadelphia, he assailed the Articles of Confederation in terms so scathing that he had to be talked down by other nationalists.

Hamilton was always all too ready to “let out the secret,” as Madison once put it. And as Madison’s remark makes clear, “the secret” was shared. What the Morris group seems to me to have believed is that federal taxation would unify the people, across state lines, in a new relation to the central government. That was the secret, and Morris was its main author. Rakove’s re-framing Morris as “willing,” unlike Hamilton, “to accept” the existing system (307), doesn’t undermine my sense of Morris’s role as Hamilton’s mentor and aegis not only in funding the public debt to overcome the states’ finance policies and yoke the creditors to national aims but also in executing a step-by-step approach to bringing about a fundamental change in American government, an approach that in the end, as the frustrated Hamilton might have predicted, didn’t work. I think Morris accepted the existing system only in that he didn’t admit that certain measures that I, and others both then and now, can’t squint hard enough not to see as fundamental changes were just that, fundamental changes.

Too many things not only in Ferguson but also in the primary record don’t get explained for me by Rakove’s reading. They include the Morris-Hamilton correspondence that went on when Hamilton, as Morris’s employee, was collecting, or failing to collect, federal taxes (I see the two already sharing eyerolls about the idiocy of the entire confederation system); Morris’s disingenuousness in framing every measure he wanted to make permanent as a temporary war measure; and his concerted effort to work with the interstate public creditors to de-rail states’ measures for dealing with the public debt, and to abolish other popular economic laws. He called those laws a “detestable tribe.” He wanted the creditor class to get them struck down in their states and urged the governors to veto them. Did he think the Congress already had a sovereign power not just to tax the states’ citizens but also to lobby them, via an appointed executive, to repeal or veto specific state laws? If so, OK, I guess—but I can understand how, at the time, that might have felt pretty radically contrary to the original idea of the relationship of the states to their Congress. To believe that members of the Morris crew (with the exception of Hamilton!) supported the confederation’s perpetuation as-is, you have to think they had an eccentric view of the confederation and that their view was also the only proper view.

But this above all. It was of course a fundamental principle of the day that if you’re going to tax people, you have to have their consent, via representation. Yet Rakove says: “Morris and his supporters probably believed that the actual collection of the impost and land, poll, and excise taxes [by the confederation Congress] would not prove controversial in practice.” (306)

I’m not quoting Ferguson when I say: ??!!?

Hamilton knew federal collection would prove controversial indeed, just as it had been within the states. A main point of making taxation federal, according to him, was to consolidate enforcement in federal might and make it pervasive, defeating popular recalcitrance. Later, under the Constitution, Hamilton reassured the new U.S. Congress that a physical capacity now existed to compel a level of tax compliance that the states had never been able to achieve. Always out in front, he also soon showed himself eager to exercise that capacity. In my book, the prospect of armed enforcement of taxation against democratic uprising was to Hamilton a key benefit of imposing taxation, and while Rakove might explain that by, again, excepting Hamilton from the mainstream of founding thought, it's hard not to see Washington concurring with Hamilton here. And round and round we go.

In this context—a supposedly reasonable expectation of the non-controversiality of federal tax collection under the confederation—the picture I start to get of Rakove’s confederation Congress, a body with powers whose legitimacy emanates penumbrally from a sovereign national government that already somehow underlies the confederation itself—emanates, in Morris’s supposed projection, all the way into the pockets of the citizens of the states—seems to get nearly mystical.

For two reasons:

1) I think people really believed that to be legitimately taxable, you had to be represented. They showed themselves ready to fight for that principle both in the Revolution and, later, in the Shays Rebellion.

2) I see the state legislatures, not the states’ citizens, as being represented in the confederation Congress and the people represented only in their elected legislatures. You might say that the people were represented virtually and indirectly in the Congress, since their elected governments appointed the delegates, but I don’t think the people would have agreed, especially once the Congress’s powers got beyond taxing merchants’ imports on behalf of the bondholders and started taxing regular people (the merchants, as bondholders themselves, would have directly benefited from the impost). In 1786, when people who felt themselves underrepresented in the state of Massachusetts started getting taxed on behalf of paying the bondholders, they rebelled, an outcome I can’t imagine surprising Hamilton, Morris, and the others. In my reading—in this case a very standard reading—the Shays Rebellion gave the nationalists just what they needed politically by way of scaring the whole interstate investing class, even members of that class who had recently opposed nationalizing efforts, into creating a genuine national government.

So I guess this argument really comes down to what you think a national government is. I think it has to do with jurisdiction over individuals throughout a given territory, and that members of the founding generation, on all sides, thought so too and believed that such a government’s legitimacy comes from the consent of the governed, given through representation, as in the Constitution, which is why the confederation Congress did not enjoy sovereign powers like taxation, and why the government under the Constitution did.

I know my interpretation is old-fashioned and fairly simple, even possibly conservative. Rakove’s is subtle and imaginative and resists being nailed down, and I appreciate what I’d have to call the intensity of his scholarly independence not only from the progressives but also from some of the consensians, though like them, he does fundamentally dissent from—Ferguson says ignores—class war as a significant driver of the Constitutional Convention, the blank spot that I think the consensus school came into existence to enforce. I regret not having engaged in the notes to The Hamilton Scheme with Rakove’s dispute with Ferguson regarding both Morris in the confederation in general and the Newburgh Crisis in particular.