By Robert E. Wright, Nef Family Chair of Political Economy at Augustana University and the Alexander Hamilton Awareness Society’s National Hamilton Scholar for 2017. My prepared remarks presented at the Weehawken, N.J. Elks Lodge, 11 July 2017
In many ways, words are like money. If the supply of money grows too quickly, the value of each dollar decreases and the economy experiences what we call inflation. Likewise, the value of each word is diminished in direct proportion to the number of times it is used. Hero is one such word. Since 1851, The New York Times has used the word hero in its pages almost half a million times. Almost a quarter of those uses occurred in the Third Millennium AD, or just the last 17 and a half years. That finding, by the way, isn’t determined by the length of the newspaper as the word hero was used more frequently in the 1870s and 1880s than in any subsequent decade until the 1980s, when its use took a strong upward trajectory that might be termed skyrocketing. It was certainly faster than the growth in the number of words published in the Old Gray Lady.
Because of inflation, when economic historians cite a nominal dollar figure from the distant past, we often remind readers or listeners that a dollar used to buy a lot more than it does today. How much more is more a matter of perspective than science. The website measuringworth dot com currently lists six different ways of comparing a dollar in 1790 with a dollar today and the estimates from those 6 methodologies vary from a low of $25 to a high of almost $100,000. Anyway you slice it, though, the dollar has depreciated an appreciable amount.
When I assert that Alexander Hamilton was “America’s Hero,” I mean that he was a hero in the 1790s’ sense of the word, not in today’s depreciated language. How many orders of magnitude different those are, I’ll leave for you, the listeners, to decide.
And, of course, I speak of the real Hamilton, not the protagonist, or hero if you will, of the musical Hamilton. I thought about calling Hamilton a superhero but decided that sounded too cartoon-ish. Hamilton was a real person, not a fictional character.
The real Hamilton was a real hero, an individual, as the Oxford English Dictionary put it, QUOTE admired or acclaimed for great qualities or achievements UNQUOTE. More specifically, Hamilton was a hero-leader and hero-founder, two subspecies of hero that help to found and lead new countries and institutions.
Hamilton has also been called a military hero for his actions on Revolutionary War battlefields from Princeton to Yorktown. Here, though, hero collapses into courageous at a time when capable officers who displayed courage under fire were a dime a dozen. Literally a dime a dozen if you accept the higher valuations of the dollar from measuringworth dot com.
Seriously, for an achievement to be termed great, as in large or important or, if I may, heroic, the achiever must be an indispensable component of the achievement. He, or she in the case of the heroine, cannot be merely another component or factor in the outcome, he must be the primary causal agent, the keystone or linchpin of the whole affair.
When I call Hamilton America’s Hero, I do not mean that America embraces Hamilton as its hero. It apparently does so at present, thanks in part to the popularity of the aforementioned musical, but to this day I cannot obtain employment teaching in a college or university history department, despite having published 18 history books, because Hamilton is anathema to the powers that be in academe and I am pro-Hamilton enough to have named my firstborn son Alexander Hamilton Was Wright. That’s right, his first name is Alexander, his two middle names are Hamilton and Was, and his last name sounds like correct but actually means a maker of things, as in Alexander Hamilton made America. I will not give the silly views of Hamilton’s critics a hearing here today but I thought them wrong when I earned my Ph.D. twenty years ago and today I know that they are wrong.
Hamilton is America’s Hero because he was indispensable to the nation’s founding and subsequent flourishing. Only his long-time friend George Washington was similarly heroic and, indeed, the two were indispensable to each other. We might consider them a heroic dyad, a binary star system, each grown stronger with the help of the other’s gravity … and gravitas. Had either of those luminaries perished at Valley Forge, or during that even more miserable but less well known winter at Morristown, we almost certainly would not live in a prosperous, united United States.
That claim, strong as it is, can strain credulity only in those who do not fully comprehend America’s precarious position even after Britain formally recognized its independence. Everything in America, or at least everything of importance, was a mess in 1785. Just a decade later, everything of importance was as perfect as was then humanly possible. One man was directly responsible for the sea change in the young nation’s affairs, and it certainly wasn’t Thomas Jefferson or any of his Virginian minions, it was the bastard brat of a Scotch pedlar, a precocious and well-vetted immigrant from the West Indies. Imagine that.
In 1785, the nation had several competing units of account and scarcely any money in circulation, save some state-issued paper bills of credit that lost value almost daily. In 1795, America enjoyed, thanks to Hamilton, a single unit of account, the U.S. dollar, and a sufficient supply of money, rendered stable in value because Hamilton legally linked it to the precious metals. Although disrupted by the Civil War, the U.S. monetary union has survived to this day and is largely responsible for the nation’s close economic and political integration.
In 1785, private credit was scarce because only a few banks existed. In 1795, the number of banks, and the amount of capital invested in banking, was growing because Hamilton wanted it that way. In addition to writing and supporting state bank charters, Hamilton induced Congress and Washington, above the self-serving din of Jefferson, to charter the Bank of the United States, a for-profit corporation that stymied the Panic of 1792 and kept the federal government’s finances in good repair.
In 1785, state taxes were so onerous that they stirred revolutionary discontent severe enough to raise the specter of successful tax rebellions in Massachusetts and elsewhere. In 1795, state taxes were light because the states had been relieved of their onerous Revolutionary-era debts by Hamilton’s assumption plan. Rather than threatening the social and political order, rebellions against federal taxes were mere annoyances, easily put down by the dyad and the gravitas of the new federal government.
In 1785, the national government and most of the state governments were bankrupt, unable to pay the interest due on their debts much less to discharge the principal. A decade later, the United States was among the most creditworthy nations in the world as judged by the price and quantity of its bonds traded in Amsterdam and London. America used its high credit standing to purchase new lands, like the Louisiana Territory, and fight important wars against slave masters and global tyrants. The high price of its bonds was proof that, for all its foibles, the U.S. federal government fundamentally respected property rights and was not going to bury itself in debt.
In fact, Hamilton helped to establish a sort of fiscal constitution that lasted for nearly two centuries. The first major rule was to borrow only when absolutely necessary and to establish the taxes needed to repay a new debt at the same time the debt was incurred so that everybody realized that borrowing was not free, just expedient in certain circumstances.
In 1785, the country was a loose collection of states, not a unified whole. In 1795, due to the widespread ownership of federal bonds, thousands of Americans looked to the federal government, not to their state governments, as the font of sovereignty. To protect their pecuniary interests, those bondholders, as Hamilton predicted, cemented the Union together when a host of forces, like slavery, threatened to tear it asunder.
In 1785, the young nation’s economy was largely agricultural and small-scale. It still was a decade later but growing numbers of corporations were already changing the structure of the economy, shifting it towards finance, transportation, and manufacturing. Hamilton led the way here by establishing the Society for the Establishment of Useful Manufactures in Paterson, New Jersey, which was meant to be a demonstration project, not a monopolistic behemoth as Hamilton’s detractors claimed. Hamilton also pioneered corporate governance rules that encouraged investment by small investors by limiting the voting powers of large investors in corporate elections.
Commerce, internal and international, nearly at a standstill in 1785, also became more important because of Hamilton. Despite numerous claims to the contrary, Hamilton was not in favor of protective tariffs. The taxes on imports that he suggested to Congress were revenue tariffs only, designed to maximize the federal government’s revenues, and hence its ability to service and repay its debt, not to protect specific domestic economic interests. Hamilton’s Report on Manufactures makes that point clear, but the long, complex document has been widely misinterpreted and misused by those who value partisan ideology over truth.
All of those policy reforms were made possible by the passage of the U.S. Constitution. While Hamilton played little role in most of the convention’s debates, he essentially called the convention together in Philadelphia in the summer of 1787 and, through his strenuous efforts writing as Publius in The Federalist Papers, as well as his role in New York’s ratification convention, Hamilton ensured the Constitution’s passage and its subsequent interpretation by generations of jurists. Judicial review, long one of the most important of our governmental checks and balances, also can be traced directly to Hamilton.
Had Hamilton lived another 20 years, as his two main detractors, John Adams and Thomas Jefferson had the good fortune to do, all of this would be much better understood. Instead, Hamilton’s legacy has been used, and abused, to support policies and politics that Hamilton abhorred. Had he lived, both of the leading causes of the Civil War, slavery and protective tariffs, would have been reduced if not eliminated and the horrors of that conflict, and its long aftermath, avoided. I daresay our GDP would be a third higher today had Burr’s bullet not found our hero’s abdomen.
Alas, the events that took place on this very ground ten score and a farmer’s dozen years ago ended both Hamilton’s heroic deeds and his ability, in what would have been his later, reflective years, to recount all that he had done for posterity. It has been left to scholars like Richard Brookhiser, David Cowen, Forrest McDonald, Michael Newton, Richard Sylla, and a handful of others to piece together Hamilton’s many contributions to America and its prosperity and to speculate about his future heroism. But rather than lament what would have been, we should rejoice in what was, and honor Hamilton for being our hero, America’s Hero, the man, along with Washington, most responsible for this country’s greatness, past and present. We cannot resurrect Hamilton himself, but we can certainly resurrect his insights to guide us through the troubled times ahead.
Honor is another word that has lost value over time. In Hamilton’s time, to honor somebody was to repay him or her full principal and interest. Applying that concept today is subject to interpretation, but I would say what we owe to Hamilton is the Truth, as close as we can comprehend it. That means, at a minimum, not make clearly false statements about the man. So don’t claim that a statesman who wanted an energetic government wanted a big government, that a poor bastard was an aristocrat, that somebody who wanted checks and balances to apply to everyone was a monarchist, that a financier who built an amortization clause into his bonds and who stressed that a national debt could become excessive wanted a large, perpetual national debt, or that an economist who simply discussed the microeconomic effects of protective tariffs wanted to implement them. Honor Hamilton, honor Burr, honor all of the Founders by studying their own words and actions or at least by reading the best, most honest scholarship about them available.