Money  /  Q&A

What We Still Get Wrong About Alexander Hamilton

Far from a partisan for free markets, the Founding Father insisted on the need for economic planning. We need more of that vision today.

Michael Busch: You published Radical Hamilton in August with Verso Books. Let’s start at the beginning: Who was Alexander Hamilton? Why did you write this book?

Christian Parenti: Hamilton was a Revolutionary War soldier, advisor to George Washington, and major Federalist politician who played an important role in framing the U.S. Constitution and became the country’s first Secretary of the Treasury. He created the country’s modern financial system and central bank. Less commonly known, he also laid out a plan for government-led industrialization—that is to say, a plan for wholesale economic transformation.

I wrote the book by mistake, because I stumbled upon Hamilton’s often name-checked but rarely discussed magnum opus, his 1791 Report on the Subject of Manufactures. At first the plan was to just republish the Report with an introduction. But that grew into this book.

As I read up on the Report it became clear that there were major omissions and misunderstandings about Hamilton’s political economy and its role in the course of U.S. economic development. Cast by most historians as the patron saint of free markets and financiers, Hamilton actually begins the Report with an attack on Adam Smith and laissez-faire economics. He then goes on to present a sweeping program of transformation-oriented economic planning. This is totally at odds with the mainstream story of American capitalism and Hamilton’s place within it. Most books on Hamilton do not address Hamilton’s vision of a planned economy.

MB: Hamilton has enjoyed quite a revival recently. There’s the musical, obviously, but he has also been the subject of renewed scholarly interest in recent years. Can you talk briefly about how your work stands in relation to the body of work done on Hamilton over the last decade or so?

CP: The book is not a biography, so I was more interested in the literature on the Revolution and the Early Republic than on Hamilton per se. In fact, the historians whose work I use most are actually pretty hostile to Hamilton—for example, the excellent Woody Holton.

In soliciting endorsements for the book, I tried to curate something of a private joke by getting endorsements from a widely disparate set of scholars. Anyone familiar with the literature on the American Revolution and early republic should be at least a little surprised to see a book endorsed by Holton (a progressive historian of eighteenth-century social movements) and Richard Sylla (an economic historian specializing in finance, professor at a leading business school, and in no way a man of the left ), not to mention Marcus Rediker, a leading Marxist historian of the eighteenth century who takes a more internationally oriented approach to the study of capitalism.

The point of my private joke is to suggest something beyond the classic “aristocracy vs. democracy” debate that too often frames discussions of the Founding, the Constitution, and the Early Republic. I argue that a third agenda also operated: the struggle for national survival and state making. As I read the evidence, the 1780s saw profoundly destabilizing, elite, self-dealing gangs operating at all levels: local, state, and national. Hamilton’s struggle was, amidst spiraling socioeconomic and military crisis, to build a state that could drive an economic transformation, that would in turn ensure the survival of that state.