Hans Eicholz

Hans Eicholz is a historian and Liberty Fund Senior Fellow. He is the author of Harmonizing Sentiments: The Declaration of Independence and the Jeffersonian Idea of Self-Government (2001), and more recently a contributor to The Constitutionalism of American States (2008).

Charles Koch’s Jefferson

JeffersonTo whom does Jefferson belong in today’s political debates? The reality, it seems, is everyone. Quotes can be found on almost any topic expressing virtually any sentiment, in large measure because unlike so many others of his day, Jefferson saved everything.

That’s why I am rarely bothered by either side of the political spectrum quoting him. What does bother me, though, is when people who ought to know better think they can claim Jefferson, exclusively, enlisting his pen in their ideological causes.

Richard Eskrow ought to know better.

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Wills and the Individual Conscience

As David Conway has noted in this space, the past week has seen quite a brouhaha in the United Kingdom over the Law Society’s decision to issue guidelines for sharia-compliant wills.

The controversy has sparked commentary here as well. But there appears to be considerable confusion on this matter, resulting in some very ill-considered assertions—ones that could backfire on time-honored conservative principles. The message here must remain: “Look before you leap.”

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Can Scotland Govern Itself?

What does it take to secure an independent, self-governing nation? Arguably it takes a self-governing citizenry. And what does that mean? Generally speaking, it means a citizenry composed of persons capable of independent thought and action—capable of sustaining themselves through much of the thick and thin of life through their own voluntary efforts in civil society.

A modern welfare state works directly against that capacity by encouraging ties of hierarchical dependence on political authorities. The modern fallacy is to believe that majority voting is sufficient to prevent the abuse of power; anyone familiar with the workings of government cannot seriously entertain that idea.

The wild increase in laws and more importantly, administrative agency rules, does not translate into the rule of law, but into the selective enforcement of special programs by those entrusted to administer them. That sort of re-feudalization of the economy and society was well understood by Mancur Olson years ago in his book, The Rise and Decline of Nations. But Olson was really only further developing the critique of mercantilism first put forward by Adam Smith.

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American Liberty and the “Pursuit of Happiness”

In reflecting further on the issues raised by Ted McAllister’s emphasis on the American historical experience of liberty in this month’s Liberty Law Forum, I find myself returning again to consider the meaning of a particular phrase of the Declaration of Independence: “the pursuit of happiness.” I have written about this before in other places, but McAllister’s highlighting of historically lived experience, brings out the significance of this passage even further.

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To Keep America Will Be to Keep Its Balance

Many long posts ago, this website hosted a discussion of Michael Greve’s wonderfully illuminating Upside Down Constitution. A key part of the thesis was the degree to which local self-governing political bodies in America have steadily ceded administration to national agencies, not as the helpless victims of a national takeover, but as willing, nay eager participants in the national redistribution of our common wealth.

Without a consideration of basic principles, of basic notions of right and wrong, of moral and philosophic ideals, this transfer of self-governance from the local to the national, becomes very hard to criticize.

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Restoring Federalism

In the third volume of Law Legislation and Liberty, Hayek argued that something was amiss with western constitutions. They have failed to contain the growth of government or prevent the encroachments of discretionary power. He thought it was time to rethink the constitutional structures of the free world.

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Economists Should Return to Moral Philosophy

Policy makers and economists of various stripes have had a field day since the onset of the last financial crisis blaming the downturn on market failures and proclaiming new regulatory fixes. Never mind that most of the mainstream either did not anticipate the collapse or had even preached perpetual boom, they were brimming with solutions. That fact has set a few members of the economics profession on edge and in one case, has inspired an important new contribution to thinking about markets. What is the right way of conceiving the relation of public policy and law to economics?

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Alexander Hamilton’s Legacy in Banking and Finance

We come now to the final and perhaps most important part of McCraw’s Founders and Finance: the practical effects of Hamilton’s political economy. Here is where Hamilton’s ultimate legacy is often said to be. The precedent of the idea of a national bank or ultimate regulatory authority over money became, at this point in time, inextricably part of American politics. This is not to say that the idea of national banking was inextricable institutionally. Andrew Jackson ended the second Bank of the United States, and the idea of the Independent Treasury held sway until the National Bank Acts of the Civil War. But Hamilton had established the first political precedent of national involvement in money and finance. That history and its supposed success would be continually asserted to pave the way, at least in part, for the Federal Reserve System in the early twentieth century.

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The Bank of the United States and Mr. Hamilton’s Surprise!

As noted in the first post, Albert Gallatin initially aspired to being a private, rather than a political, entrepreneur. To that end the firm of Albert Gallatin and Co. tried to attract renters or buyers to land in Pennsylvania. McCraw describes how the firm “organized a company store, a boatyard on the Monongahela, and later a glassworks.” (192) Like many commercial men of his day, not the least of whom was Robert Morris, Gallatin’s speculations in land development eventually failed, but the experience of trying to make a go of it in the private economy was important.

Unlike Hamilton, Gallatin had a more nuanced feel for the variations of taste and opinion that a businessman must have to adapt to opportunities as they are, rather than as he might wish them to be. Failure has a way of accentuating the point. Again, McCraw’s text does not specifically highlight this difference, but it comes through well enough in the evidence.

As noted in the two previous posts, a powerful illustration is the attitude of both men to the subject of finance and its relationship to the economy. Most of those who dabbled in political economy at the time presented a hodgepodge of Smithian free-trade arguments and mercantilist expediencies, and neither Hamilton (as we have seen) nor Gallatin were immune to the mixing of apples and oranges.

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Alexander Hamilton: Switzerland or the Caribbean, Anyone?

McCraw uses the  immigrant experience to explain in part the development of a national perspective (see here and here for the 1st 2 installments in this series). Being originally outsiders, immigrants could see the forest for the trees while many, if not most of their native born friends were freighted with the prejudices of particular states. (363) It was this, combined with Hamilton’s and Gallatin’s natural brilliance, McCraw contends “that enabled them to envision and then to execute the responsible deployment of rootless capital in the forging of a new economy.” (326)

Looked at from this perspective, McCraw understandably connects only partially to his subjects pre-American experiences, and then more for Hamilton than Gallatin. Much of the former’s sense of urgency and impatience stemmed, as he notes, from Hamilton’s youth on the island of Nevis: “He knew from his boyhood that things could fall apart on short notice.” (49)

The Caribbean was not the most stable region politically. Hamilton’s own French Huguenot background through his mother,  and his father’s origins in Scotland, testify to the imperial seesaw that characterized the geopolitical reality of the islands. Yet for Gallatin, he misses a similar opportunity.

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