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False Profits

Hamilton’s Capitalism Is Not the Answer to Climate Catastrophe

March 19, 2021

Radical Hamilton: Economic Lessons from a Misunderstood Founder
by Christian Parenti

In his new book Radical Hamilton: Economic Lessons from a Misunderstood Founder, Christian Parenti wants to resurrect Alexander Hamilton to fight climate catastrophe using the concentrated power of the capitalist state. Rather than a propagandistic folk hero in a manner of the Broadway hit, Parenti attempts to reframe Hamilton as an eco-warrior whose 1790s financial plan is a “greener means proper” (p. 237). Conscious of Hamilton’s role as the architect of US state capitalism, and ultimately, the global capitalist hegemon, Parenti’s judgement is clouded by a desperate search for state intervention to reverse climate catastrophe.

There is much that Parenti gets right. Hamilton’s financial plan established a strong state that could set up, run and protect a national capitalist economy. Few have explored the monumental extent of Hamilton’s theory of political economy as thoroughly as Parenti, and he’s dead on in recognizing Hamilton’s central role in the design of the capitalist state and ultimately world empire. Setting up an integrated and productive capitalist economy required a stable state that could issue a reliable currency, a dependable financial system that could generate investment capital, protection of private property with a robust military, and a national tax system to finance it all. Parenti is correct that in generating the foundational myths of American “free market” ideology Hamilton has been somehow transformed into something he wasn’t. At the beginning there was the state, and the state set up and nurtured the fledging capital economy. As Parenti explains so well, because “capitalism is produced and reproduced by the state” all US capitalists practice a sort of “bastardized Hamiltonianism” (p. 174).

But here we depart ways. Hamilton sought the concentration of economic and political power in the new federal government established by the US constitution not as an “anti-imperialist” proto-dependency theorist, as Parenti asserts (p. 5). Rather, he concurred with Madison that the only path for the survival of the fledgling national capitalist class was a strong state that could vanquish the growing power of an organized and armed working class of small subsistence farmers, seditious soldiers, laborers, rebellious slaves, and powerful native peoples.

As this motley crew gained ground in its assault on many of the state governments, mercantilists and slaveocrats found their plans threatened. Paper money was widespread, creditors were weakened, slaves were increasingly engaged in open rebellion, and waged workers were scarce, expensive, and beginning to form unions and “strike with their feet,” leaving for cheap land stolen from native peoples.

While Parenti recognizes this array of class struggles in chapters 7, 8, and 9, he appears to miss entirely that the constitution was explicitly designed to thwart it both politically and economically. Parenti’s focus on “what the government was empowered to do, rather than how the government was designed to function” is only half the story (italics added, p. 126). How the US constitution established an undemocratic system is worthy of analysis, not only to assess the outcome of 1787, but to understand how it was intentionally designed to preclude any other possible outcome. In short, the framers designed the federalist system both to impede democratic control of the polity and prevent democratic control of the economy.

The powerful developmentalist state Parenti admires is not only the primary impediment to reversing climate catastrophe; it is the very cause of two key problems. The developmentalist state is the reason for both why we have yet to do anything about climate catastrophe and why we will not be allowed to use the state to intervene to “deindustrialize” from fossil fuel use and pursue the “green industrialization” he advocates. (p. 237) Parenti’s logic flaw of excluding the how the government was designed to function is fatal to his analysis of the what.

The reason for this analytical flaw is both complex and simple. The US constitution is a well disguised constitution for capital. It is certainly the case that we sometimes deploy the constitution in struggles to contain, or infrequently and temporarily reverse, the worst excesses of capitalism. Yet, the very rules of the system foreclose all but minor temporary pyrrhic victories. That is because the state was designed not only to protect and promote property, slaves, debts, land, and other tangible property, but to tie the hands of those who would seek to transform the relations of production by using the state to carry out an assault on all property. This is where liberal Supreme Court Brennan’s “counter-majoritarian difficulty” merges with Justice Scalia’s “originalism” in protecting property. The complex array of checks and balances and separation of powers in the “federalist” system are quickly transformed into minority checks that give the upper hand to elites to stop change sought by the economic majority or spike it by a death of a thousand delays.

By consciously deciding to sidetrack “how the government was designed to function,” Parenti misses that the undemocratic design of the system remains with us today.

These “minority checks”1Ovetz, R., Capital’s Constitution: How the US Constitution Thwarts Democratic Change (London: Pluto Press, forthcoming 2022). are littered throughout the document and new ones are regularly devised. In chapters 9 and 10, Parenti details the range of federal powers transferred from the states to Article I which can be activated by the Article I “necessary and proper” and Article VI supremacy powers. Certainly the framers designed the federal government to have a “negative” (what the framers called a veto) over state  laws and the actions of each other branch. And this is only one article of the constitution. The roadblocks and impediments leave minority checks embedded  throughout the system like cluster bombs ready to explode at any time slowly bleeding to death any well intentioned bill, law, regulation, or court ruling by either the federal government or the states.

Parenti comes up short by completely overlooking other centrally important powers in the design of the system. The Article I contract clause resulted in the passage of replevin laws that blocked all efforts to interfere with contracts. Article VI also made all debts the supreme law of the land, forever tying the hands of those who might wish to someday repudiate prior debt accumulated to build the destructive and exploitive capitalist economy.  While it is well known that the constitution protects slaveholding as property, it provides property itself with an array of rights, including speech (1st amendment), probable cause (4thamendment), due process and just compensation protections against expropriation (5th amendment), and equal protection (Article IV and 14thamendment). Congress even wavered for decades temporarily passing and then repealing bankruptcy laws despite it being an enumerated power in Article I.

But by consciously deciding to sidetrack “how the government was designed to function,” Parenti misses that the undemocratic design of the system remains with us today. The Electoral College, separate elections in every state, presidential veto, federal supremacy, inequality in the Senate, bicameral legislature, large single member districts for the House, and the lack of popular vote on the constitution itself (and all amendments), among countless other critical features, establish so many roadblocks as to make any change virtually impossible without the consent of its most stubborn defenders. Parenti is right that James Madison and Hamilton embraced the Latin concept of divide et impera (divide and conquer) designing the constitution to fragment the economic majority into so many groups with the intention of attempting to render working class unity nearly impossible.

But Parenti makes a false analogy between the relatively more democratic state governments under the pre-1787 state constitution and the US constitution. While it is true that the state systems had some less democratic features than the constitution, he entirely misses that most states revised their constitutions during and after the revolution. The reasons are now well documented.

The states increasingly responded to organized demands, petitions, new political parties, and riots from organized movements of subsistence farmers, mechanics, and rank and file militia soldiers – not to mention armed rebellions by Native peoples and slaves – to democratize the economy and polity. As a result, most of the states implemented paper money and tender laws, land banks, debt relief, removed some property requirements to vote, abolished judicial review and vetoes, and created unicameral legislatures.

Even if a militant movement to abolish capitalism managed to overcome these impossible odds, the coercive power of the state underlies it all. Elites could call upon Article I and IV’s powers of the sword, deploying the army and navy and abolishing habeas corpus; Article II’s power to send Congress into recess; Article III’s power to prosecute insurgents for rebellion and treason and set up new courts to carry it out, and the 13th Amendment’s power to use prisoners as slaves.

In looking for a hero in Hamilton, Parenti inadvertently discovers the culprit for our rapid descent into crises wrought by the US-dominated global capitalist system, a picture that makes the glorification by the eponymous hit Broadway musical even more insidious. Hamilton was certainly a radical, but not the kind that deserves emulation. Parenti appears to have left the last vestiges of his socialist analysis behind in embracing the hero-worship of one of the framers: a man who designed the system imperiling the very survival of humanity and many other biological life forms on earth.

Hamilton is not a model for radicals. After all, he was the leading proponent of authoritiarian rule whether it be a return to monarchy or a military junta. Hamilton was hardly shy in his public displays of affection for monarchies in private letters and at the Constitutional Convention. He also played a central role in the 1783 Newburgh plot to use the army to overthrow Congress so that he could bypass the hated Articles of Confederation and impose his and his co-conspirator Robert Morris’s financial plan directly2Ovetz, R., Opinion: America’s first attempted coup also tracks to Jan. 6, San Jose Mercury News, (February 7, 2021). .  Let’s also not forget how he did the bidding of the slaveocracy to get his state capitalist system into place. Hamilton showed us where his version of state capitalism leads, and we are living with the nightmarish results.



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