Donald Trump’s jettisoning of long-established Republican orthodoxies on trade and the role of the state stand among his most startling accomplishments. The liberalization of trade policy and the deregulation of the national economy were central to Republican policy from Ronald Reagan through Mitt Romney’s 2012 campaign. No longer.
Although Trump’s reversal of that long-standing orientation alienated some business leaders, he received more business support in 2024 than he did in 2016. This should not come as a shock. Eras of massive technologically driven change often bring struggles within the business world over economic policy.
The historical figure who did most to develop an American tradition of pro-business government and to embed that tradition in the structure of the American state was Alexander Hamilton. First the Federalists, then the Whigs, and finally the Republicans championed his ideas. The Federalists and Whigs tended to support tariffs, partly for protectionist reasons and partly to generate revenue to build domestic infrastructure. Republicans continued that high-tariff tradition into the 1930s. The Hamiltonian tradition of the Republican Party also included more support for Big Government than the party of Reagan was comfortable admitting.
Hamilton, throughout his tragically shortened career, was preoccupied by the relationship between democracy, power, and wealth. Given the rowdy disposition of the American people, he saw no way to build a stable American state that did not accommodate the demand for popular self-government. Yet, as was obvious to anyone who had studied its history, democratic governance has its pitfalls. Demagogues could prey on the emotions and ignorance of the masses. Rampant corruption was never far away.
The Founders relied on a system of checks and balances to address these dangers. But Hamilton was focused on another threat—and another sort of solution. He put capitalism and technological development front and center in his thinking about the future of the American republic. He believed that capitalist development was essential for national power and unity. Prosperity at home would strengthen and legitimize the federal government, while America’s economic prowess would provide the basis for the military strength that could keep the country secure.
Change is the natural and inevitable result of the Hamiltonians’ success. The capitalism they promote transforms the economy, and they must repeatedly redefine their agenda to meet the new conditions. Hamiltonians supported the construction of the Erie and Chesapeake & Ohio Canals in the early years of the republic, then shifted to railroads, and ultimately to interstate highways and airports. Each of these technologies required novel institutions, legal frameworks, and financial incentives. Managing their consequences required, among other things, the development of the administrative state that so many conservatives currently deplore.