Alexander Hamilton and Capitalism: Making America

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Script:

For most of human history, wealth was presumed to be finite.

Consider a boy on a playground with 10 marbles.  How can he get more? There is only one possibility. He has to take someone else’s marbles.

Until relatively recently, wealth was mostly in land and the only way to get more land was to take it.  Conquest was the natural mode of human acquisition. 

And that’s how most countries evolved and grew — through force and conquest.  

The American Revolution was motivated in large part by resistance to this old way of doing things. To put it mildly, the colonists didn’t like the idea that the English crown could take their money or property without their consent. 

“No taxation without representation,” they protested.  

Still, the control of money and property was only part of the picture. The bigger challenge would be this: could the New World find a better alternative to the Old World’s conquest-and-seizure model? 

Alexander Hamilton, the first treasurer of the United States, had the answer. 

Under his brilliant stewardship, the new nation developed a new concept of wealth creation: capitalism — based on innovation, invention, and enterprise. And it would be available to every citizen from any background with the willingness to work for it.  

America could get more marbles without seizing anyone’s marbles. We would just make new ones. 

True, later in America’s history, the government seized Indian land, but that wasn’t Hamilton’s idea. 

And, obviously, there were inventors and merchants around before America.  But America is the first society to be based on invention and trade.  America, as Karl Marx later understood, is the capitalist society par excellence.  

Hamilton was the man who made it so.   

Indeed, Hamilton’s own life reflected the upward mobility he wanted to be a defining characteristic of the new nation.  
 
Born on the small Caribbean island of Nevis, he was orphaned at 12. By 14 he was running a shipping company for a local merchant. At age 20, he made his way to New York. Soon thereafter he fully embraced the revolutionary cause. By 23, he was George Washington’s most trusted aide. At 34, he was running the US Treasury, the largest department by far of the new government. 

In contrast to Hamilton, the other leading founders—Washington, Jefferson, Madison—were Virginia farmers.  If it were up to them, America would have been set up as a network of farming communities, with towns conceived as places where agricultural produce was bought and sold.  

It was Hamilton who laid the groundwork for America to become a prosperous urban, industrial, commercial society.

Hamilton envisioned America as a nation whose nuclei would be cities, centers of vigorous invention, innovation, and trade, with new types of people—entrepreneurs, mechanics, financiers, salesmen, and so on—all working to enjoy the “pleasing reward of their toils.” 

But how to create such a society. That was the question. How to make New York, which was then a modest town, into the New York City we know today: a flourishing center of finance, commerce, publishing, and the arts?

Coming from the islands of the West Indies, where the buying and selling of human beings was the defining feature of the economic system, Hamilton well understood how easily the passion for conquest—control over other human beings—could overwhelm man’s better nature. 

Yes, slavery was a lamentable feature of the new country. The question for the pragmatic Hamilton was how to get rid of it—not immediately—that was impossible—but eventually, inevitably. 

In his mind, there was only one way: make it as easy as possible for as many people as possible to become as prosperous as possible. This would happen through the myriad ways of commerce. 

A commerce of this sort, Hamilton knew, would require a strong central government; not to curb freedom but to protect it.

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