New America NYC: Land of Promise


Michael Lind and Liaquat Ahamed

There is only one enduring political divide that can be traced back to the founding days of the American Republic, and it’s the one separating Hamiltonians from Jeffersonians. But, as Michael Lind, author of “Land of Promise” and director of New America’s Economic Growth Program explained to an audience at New York City’s Core Club on Wednesday evening, what defines these two conflicting American political traditions is often misunderstood.

“The issue isn’t the state versus the market, or even an argument about the size of government,” Lind explained, but rather the clash between the Jeffersonian worldview of “producerist capitalism” and the Hamiltonian worldview of “developmental capitalism.”
 
Both dominant American traditions believe in capitalism and in markets, and both are equally comfortable intervening in the market to advance their vision of the ideal political economy. 
 
The Jeffersonian “producerist capitalism” extols the ideal of directly engaging a critical mass of Americans in the economy around them. The Jeffersonian tradition is founded on a distrust of distant, concentrated power, whether that distant power be East Coast industrialists, a national bank, chain stores, New Dealers, Wall Street, an activist Supreme Court or the United Nations. Jeffersonians prefer accessible scale, endowing power in the farmers that make a community, keeping businesses smaller so as to keep the stakeholder class larger; all things being equal, Jeffersonians prefer preserving the prerogatives of local and state governments at the expense of Washington.

The Hamiltonian “developmental capitalism” worldview is predicated on the idea that this nation is a work in progress, requiring a plan and the coordination (presumably by a technocratic elite) of government, businesses and non-profits (such as research universities) to develop the nation. Hamiltonians are comfortable with mass scale, and agency, the notion that it doesn’t necessarily make sense for all of us to be directly involved in the production of the goods and services we produce and trade.
 
When asked to elaborate by moderator Liaquat Ahamed, Pulitzer Prize-winning author of “Lords of Finance” and a New America director, Lind said that these two traditions have always been self-conscious factions, but that tracing their genealogy through time “will make you dizzy” since they do not follow a tidy left-right, liberal-conservative, Democratic-Republican or blue state -red state breakdown. Indeed, at different times of history, the Hamiltonian and Jeffersonian traditions have overtaken both liberal and conservative movements to advance their worldview, and they have even swapped parties over time.
 
“If you look at the places where William Jennings Bryan (a Jeffersonian firebrand) did strongest in his progressive presidential races, these states look pretty red today, and if you look at some of Obama’s strongest states in 2008, these are states where Calvin Coolidge and Herbert Hoover did their best.”

There is remarkable geographic continuity between Hamiltonian and Jeffersonian traditions, even if the traditions changed parties because of the Civil Rights movement and other factors. The rural Deep South’s suspicion of Washington and distant industry has been a Jeffersonian constant for two centuries, even if the sentiment now finds its home in the Republican, instead of its ancestral Democratic, party.



Lind’s book, an expansive economic history of the country, plots the political contest between these two traditions against cycles of technological change.  Lind’s thesis is that throughout history there is a similar periodicity in the pace of technological innovation and political reform. So, for instance, it may not be a mere coincidence that the United States is today living in what can roughly be described as the “third Republic” (having been reconfigured around the time of the Civil War and then again during the New Deal and World War II) and the third industrial revolution (this one led by information technologies).

Technological change takes place in fits and starts, in Lind’s telling, and not all innovation is created equal. There are only a few truly disruptive breakthroughs – maybe one a generation – that catapult an entire economy further, what Lind refers to as “general purpose” technologies that (as the Silicon Valley spinmeisters like to say) “change everything.” Classic case: the steam engine, which revolutionized both transportation and manufacturing in the 19th Century. And there is always a time lag between invention (the “thing” comes into being) and innovation (deciding how can we use the thing). Lind’s book describes how America hasn’t always been as inventive as we’d like to think (we falsely take credit for many inventions) but we’ve always been strong at innovation (exploiting the inventions of others).

One common fallacy Lind is eager to refute is the notion that the American economy prior to the New Deal, and prior to the 20th Century, was some type of laissez-faire free-for-all where the state played no role whatsoever. This is vastly off track, he argues, noting that great innovators from Samuel Morse to Robert Fulton received public backing for their endeavors. The Wright Brothers, meanwhile, counted the U.S. government as their first customer once airborne, and soon were forced by the government to merge with the Curtiss Corporation, a competitor. More obviously, the U.S. economy, and particular industries, required government to take the lead in building the transcontinental railroad and other massive infrastructure projects.

And to the extent that large Jeffersonian swaths of the country – largely in the South and Southwest – had resisted industrialization, the Pentagon pulled much of it into the national economic sphere in World War II by seeding armaments industries throughout the region. The result over time, Lind argues, was to make us more with country, albeit with two traditions.

Lind’s ambitious historical and economic tour has left him somewhat optimistic about the future. He categorically rejects the idea that America (like Rome back in the day) is bound to have a cataclysmic fall after a meteoric rise. Such tidy trendlines are belied by his understanding of history and economics, and their periodicity.   

So the good news is, things can still go either way.

-- Written by Andrés Martinez

FEATURING

MICHAEL LIND

Policy Director, Economic Growth Program, New America Foundation
Author, Land of Promise: An Economic History of the United States

LIAQUAT AHAMED

Board of Directors, New America Foundation
Author, Lords of Finance: The Bankers Who Broke the World

Event Time and Location

Wednesday, May 9, 2012 - 6:30pm - 8:15pm
CORE: Club
66 East 55th St.
New York, NY 10022

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