by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Hamilton’s program emphasized what I call national vigor. He thought it was necessary to develop the country’s commercial strength to bind the country together and strengthen its ability to rival foreign powers. In Federalist No. 11, he described this vision as “one great American system” that “would baffle all the combinations of European jealousy to restrain our growth.” This meant establishing a reliable currency, encouraging the expansion of credit, and promoting economic diversification. These policies admittedly rewarded the wealthy, but he had a bigger purpose in mind. He wished to turn the wealthy into mediators of the general welfare — dispensing benefits to them in the short run but ultimately reorienting their self-interests to the national interest. …
… Madison’s views, on the other hand, emphasized what I call republican balance. He believed that the government had to behave like a neutral judge, fairly dispensing policy benefits and burdens according to the merits of each case. As such, he thought Hamilton’s policies were too one-sided in their favoritism to the wealthy. The rest of the nation should derive some immediate benefits too. He also worried about the potential for Hamiltonian mediation to corrupt republican government. He perceived a dangerous dynamism inherent in the secretary’s use of the moneyed class to promote the general welfare. … In the parlance of classical republicanism, this is corruption, as the government begins to look like an oligarchy — rule by and for the rich at the expense of the national interest.