Economic Conflicts of the Founding Era Dispel Tea Party 
Myths...and Liberal Ones, Too
William Hogeland
The Next New Deal
May 9, 2011
http://www.nextnewdeal.net/economic-conflicts-founding-era-dispel-tea-party-mythsand-liberal-ones-too

Anything but a lost, halcyon epoch of unity and
consensus, our founding era saw deep, harsh oppositions
among Americans over what kind of society our
independence from England was meant to bring about. Like
today, the direst political oppositions devolved on the
economy, and on proper uses of public and private
finance. From the North Carolina Regulation of the 1760s
to the Whiskey Rebellion of the 1790s, Americans
struggled mightily with other Americans over economic
issues.

Though little-known, those struggles had decisive
impacts on all of the famous moments in founding
history. The Continental Congress's adopting the
Declaration of Independence occurred in the summer of
1776 only because those among the financial and
political elites who wanted American liberty made
secret, common cause with radical populists who wanted
American equality. The Constitutional Convention's
proposing a national government in 1787 came in direct
opposition to progress made by the radical democrats who
promoted ordinary, working Americans over the high-
finance investing class.

So it's hardly surprising that those same struggles have
critically important echoes and resonances -- if
sometimes painfully dissonant ones -- for our bitterly
divided politics and disastrous financial crises today.

Yet despite constant appeals to founding values by
politicians and pundits across the political spectrum, a
perennial American eagerness to avoid framing our
founding period in economic terms can make it strangely
difficult to keep those all-important 18th-century
finance issues in historical focus. The Tea Party
movement, for example, has laid its claim on the
founding period, and to a great extent that claim is
indeed an economic and financial one. Casting the modern
welfare state as a form of tyranny, in large part
because of what they see as its excessive taxation, Tea
Partiers invoke the famous American resistance to
Parliament's efforts to raise a revenue in the colonies
without the consent traditionally given by
representation. Seeing founding-generation American
patriots as unified against British taxation (and
frequently misrepresenting the politics even of the
elites they invoke), the Tea Party defines its own anti-
government, anti-tax values as essential to American
identity.

The Tea Party thus edits out an alternative view of
government that prevailed among the ordinary 18th-
century Americans who were all-important to achieving
independence. Those Americans opposed elites epitomized
by the Boston merchant class, which the Tea Party,
perhaps appropriately enough, so strongly identifies
with. The internal struggle for American equality was as
important to the founding as the high-Whig resistance to
England, but the Tea Party can't deal with the populist
leaders and militia rank-and-file who wrote the socially
radical 1776 Pennsylvania Constitution, or the Shaysites
of Massachusetts who marched on the state armory, or the
so-called whiskey rebels who inspired federal occupation
of western Pennsylvania. American Revolutionary patriots
all, those democratic-finance leaders had ideas about
government's role in ensuring economic equality that
prefigured programs of the 19th-century Populists and
the 20th-century New Dealers, the very programs the Tea
Party wants to dismantle. Tea Party history therefore
has to expunge the welfare state's roots in America's
founding.

Liberals, too, can have a problem with the economic
conflicts of the founding period. Alexander Hamilton's
national finance program, which Madison and Jefferson
opposed with such intensity, was economically
regressive. Under the influence of the founding
financier Robert Morris, Hamilton made a stunningly
successful effort to yoke American wealth to great
national projects by beating down the popular-finance
movement and promoting the interest (in both senses!) of
the high-finance elites. Yet when some of today's
liberals look to Madison for support in critiquing
Hamiltonian finance, they come up empty. Madison's
attacks on central banking represented anything but an
argument for democracy and economic equality.

In fact, the activist governing philosophy of national
power that Hamilton espoused and Madison opposed gave
precedent to modern liberal ideas about an energetic
federal role in achieving social ends. Hamilton, not
Madison, was in that sense the modern liberal, and the
Hamiltonian influence on today's liberal establishment
can be seen in the Brookings Institution's "Hamilton
Project" and Peter Orszag's hanging of a National
Gallery portrait of Hamilton in his office. That kind of
liberalism makes Hamilton the author of using fervent
support for Wall Street in hopes of benefiting Main
Street.

There's another kind of liberal history, leaning
economically left, that prefers to trace a pretty
straight line from Thomas Paine to Thomas Jefferson to
Andrew Jackson to FDR, incorporating the labor movement
along the way. It thus sees democratic, labor-oriented
populism as essential to American founding values and
coming to fruition throughout American history. In this
view, the Declaration's "all men are created equal"
prophesied social progressivism (even if that's not what
the signers meant by it) and the Constitution's "we the
people" prophesied democracy (even if the document was
specifically intended to prevent democracy). The
Revolution is defined not by the split between, say,
Hamilton and Madison but by the emergence of
Jeffersonian and then, even more fully, Jacksonian
democracy. The American people become in essence social
radicals, and the development of social democracy, while
embattled, becomes a natural project of America.

One problem with that view lies in its reliance on
Jefferson and Jackson as socially progressive. The New
Dealers did an amazing job of reinventing Jefferson as
one of their own -- they built him a monument and carved
his face on the nickel and on a mountain; they put a
statue of his Treasury Secretary Albert Gallatin at the
front door of the Treasury (Hamilton, the department's
inventor, stands around out back).  But it's pretty
funny to think of Jefferson as a patron saint of
federal-government, welfare-state activism, and
Jefferson's attitudes about democracy are notoriously
slippery and problematic. The sage of Monticello could
wax romantic about small farmers, and he could get
excited about radical uprisings (in Paris), but he
wasn't about to invite small farmers up his hill, and
giving the proletariat of the American cities access to
political power -- what Paine actually helped bring
about in 1776 -- filled him with disgust and horror.

The Jackson era, too, by no means represented a triumph
of the kind of economic equality espoused by Paine,
Herman Husband, Thomas Young, James Cannon, and the
democratic-finance populists of 1760's and 1770's.
Modern forms of "consensus" history see Madison and
Hamilton alike as being superseded by Jackson, who
ushered in a rowdy, undeferential, dirty-boots, small-
business capitalism, contrasted with the gentility
shared by all of the famous founders, no matter their
differences. That kind of capitalism was hardly what
founding-era democratic-finance activists had in mind.
The Jackson administration's assaults on central banking
may be read by social-democracy historians as a
dismantling, at last, of the regressiveness of
Hamiltonian finance -- but what began flourishing in the
Jackson era can just as easily be read as fulfilling the
diverging fears of those bitter enemies Paine and John
Adams. Paine, desiring to re-order the world around a
economic equality ensured by strong national government,
would have been terribly disappointed by the cutthroat
society emerging in Jackson's America. And Adams's
warnings that democracy could only lead to machines,
demagoguery, and party wars over political fiefdoms
might as well have been describing the American politics
that began with 19th-century democracy.

Just as in Tea Party history, which sees the American
people as essentially anti-government, an act of faith
is required to see the American people as essentially
socially progressive (or essentially anything). Both
liberals and conservatives remain riveted -- hypnotized!
-- by the big-name founders, from Madison to Hamilton to
Adams to Jefferson to Washington to Franklin (with Paine
sometimes thrown in because of "Common Sense,"); they
therefore remain locked in a fight over what those
founders would or would not have supported today.
Widening the lens to include the more ordinary likes of
Cannon, Young, Husband, Christopher Marshall, Timothy
Matlack, Robert Whitehill, and William Findley, among
others who opposed American financial elitism in the
Revolutionary era, challenges all sides of today's
political debate. Bearing down on the painful fact that
a struggle over money, not ideas, marked every
significant moment during the American founding can help
enable new thinking about our struggles today.

The founding leaves us with questions about, not answers
to, the kind of American economy we want now. In this
series I've tried to raise some of those questions. This
post is my last in the series. Writing it, and reading
commentary on it here and around the blogs, has been a
great pleasure. Thanks to Lynn Parramore (and to Bryce
Covert, New Deal 2.0, and the Roosevelt Institute)! I
hope these posts help frame an ongoing conversation
about the strangely little-known, yet perennially
resonant drama of American founding finance.

William Hogeland is the author of the narrative
histories Declaration and The Whiskey Rebellion and a
collection of essays, Inventing American History. He has
spoken on unexpected connections between history and
politics at the National Archives, the Kansas City
Public Library, and various corporate and organization
events. He blogs at http://www.williamhogeland.com.

___________________________________________

Portside aims to provide material of interest to people
on the left that will help them to interpret the world
and to change it.

Submit via email: [log in to unmask]

Submit via the Web: http://portside.org/submittous3

Frequently asked questions: http://portside.org/faq

Sub/Unsub: http://portside.org/subscribe-and-unsubscribe

Search Portside archives: http://portside.org/archive

Contribute to Portside: https://portside.org/donate