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Hamilton's fiscal policies carried political aims

The most pressing threats to the nation in 1790 were political. Hamilton's financial plan carried political objectives through careful fiscal planning.

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Context

When Hamilton came up with his financial plan, the most pressing issue was not how to improve the lives of ordinary Americans, it was how to guarantee the survival of the union. Therefore, his financial plan must be interpreted not as a purely fiscal document, but as a primarily political one. Its impact on the American nation must be considered in both a political and an economic context. In this context, it is clearly a resounding triumph for the nation.

The Argument

In order to keep the union together, Hamilton knew he had to engage the upper classes in politics. By devising a financial plan from the Federal government that benefitted the aristocratic class, Hamilton was promoting the survival of the newly created government. There are other aspects of his financial plan that indicate Hamilton was a nationalist and used the 1790-1791 financial plan as a unifying tool. The federal government's assumption of state debts was designed to boost national unity and promote the government's legitimacy. By assuming the state debts, Hamilton was determined to unite the individual capitalists that were the primary holders of state debt. If they were linked by a legitimate, federal government, rather than receiving payments from individual states, Hamilton believed the moneyed class would rally around the newly formed national government. His logic was that with enough bondholders spread out across the country, they would curb radical elements in their regions that sought to undermine the federal government out of an interest to protect their assets and financial investments. With one in every 212 Americans directly or indirectly owning federal bonds, there were ample stakeholders in the new federal government. [1][2] His establishment of a national bank must also be interpreted as an attempt to further national unity. The bank, modelled on the Bank of England, was an attempt to build a partnership between manufacturers and the wealthy classes and the national government. These political aims embedded in his financial policy clearly indicate that far from chasing personal glory, or the enrichment of his friends and allies, the overarching aim of his financial plans was the establishment of a strong, unified government. This is evidently an 'America first' policy in both its conception and implementation, indicating that the political development of the nation was Hamilton's top priority.

Counter arguments

But in pushing for a financial plan that so overtly favoured the wealthy, Hamilton shattered any feeling of unity and solidarity. His financial plan rewarded those engaged in financial speculation, which drove more to take money from the pockets of the poor and funnel it directly into their expanding coffers. Hamilton knew this; yet pushed the plan through anyway. He had seen how the same policies had created a corrupt ruling financial class in the British Empire, which had diverted resources away from the public good and into the hands of their private corporations. His plan was highly divisive, even at the time. He knew that once implemented, it would immediately divide the nation into numerous political factions that made political decisions based on their own financial self-interests.[3] His logic was also flawed. Only one out of 4,000 Americans were bondholders of federal debts. There were simply too few of them to preserve unity. As Robert Livingston put it at the time: "This supposed cement will appear to consist of untempered mortar." [2] Hamilton's financial plan, therefore, did not make the nation more stable or strengthen the nation. It created divisions and rifts between the haves and the have-nots (many of the have-nots were located in the Southern states which would go on to oppose the northern government in the civil war). It is no coincidence that the nation was mired by civil war just seven decades later. The economic and social policies implemented by the early governments of Washington and Jefferson fostered division and stoked the flames of tension.

Premises

[P1] The primary aim of Hamilton's financial policies were to unify the nation. [P2] This is a clear manifestation of 'America first' policy. [P3] Therefore, Hamilton's financial plans put the nation first.

Rejecting the premises

[Rejecting P2] Hamilton's financial plan sowed division and did nothing to unite the nation. If anything it made it more unstable. [Rejecting P3] By ignoring the nation's most pressing political challenges, Hamilton did not put the country first.

References

  1. https://www.britannica.com/biography/Alexander-Hamilton-United-States-statesman/Hamiltons-financial-program#:~:targetText=When%20President%20Washington%20in%201789,support%20of%20the%20public%20credit.%E2%80%9D&targetText=His%20immediate%20objectives%20were%20to,the%20expense%20of%20the%20states.
  2. https://www.moaf.org/exhibits/checks_balances/george-washington/materials/Cementing_the_Union.pdf
  3. https://books.google.com/books?id=BkDCIOCJE00C&pg=PT54&lpg=PT54&dq=russell+kirk+hamilton+idealist&source=bl&ots=AWiynKIAJa&sig=ACfU3U3xFi0NEU1bwxJnT_Nm4LhPWw92tQ&hl=en&ppis=_c&sa=X&ved=2ahUKEwjH0o_yisTlAhWim-AKHWUKD0wQ6AEwBXoECAkQAQ#v=onepage&q=financial%20plan&f=false

Proponents

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This page was last edited on Monday, 18 Nov 2019 at 17:59 UTC